Auckland Mayor Phil Goff first proposed the 5 per cent rates rise in December. Video / NZ Herald
The average Auckland household can expect to pay an extra $230 in rates and water charges next year - in part to meet a $1 billion hole in the council's finances from the impact of Covid-19.
This follows plans by Auckland Mayor Phil Goff to raise rates by 5 per cent and plans by Watercare to hike water prices.
Goff and Watercare are keeping the financial impact of higher water charges hidden from ratepayers for now, but sources have told the Herald the figure is 8 per cent.
Watercare acting chief executive Marlon Bridge said the scale of the price rise is still being worked through, but the company is considering a new fixed charge for water and a percentage increase for wastewater.
Currently, Watercare has volumetric charges for water and wastewater and a fixed charge for wastewater.
Someone owning an average house in Auckland valued at $1,083,500 will see their rates bill rise from $2810 to $2957. An 8 per cent hike in water prices would add about $80 a year to the average water bill of $996.
The extra combined cost is about $230 a year.
The higher rates and hints of higher water bills are set out in Goff's "mayoral proposal" for a new 10 year budget that comes into effect on July 1 next year.
Covid-19 is making life dificult for Auckland Mayor Phil Goff. Photo / Dean Purcell
Goff - who promised to hold rates at 3.5 per cent this term - said the one-off increase of 5 per cent would be followed by rate rises of 3.5 per cent thereafter.
The difference between a 3.5 per cent and 5 per cent rates increase was $36 a year, he said.
The Recovery Budget as he is calling it, is a response to a $1 billion hole in the budget over four years from the impact of Covid-19 while trying to maintain and renew community assets and respond to climate change.
"This is a budget that will make a big difference in the next three years when we desperately need to make a difference," he told journalists today.
The budget will try and address the city's chronic infrastructure problems. Photo / Jason Oxenham
Goff said sticking to a 3.5 per cent increase next year would have impacted a range of projects - major upgrades to Lake, Lincoln and Glenvar Rds would not have started within three years, urban cycleways would have ground to a halt and a road safety programme would have been curtailed.
He indicated the council had looked at a range of rate rises from 3.5 per cent to more than 5 per cent.
"This Recovery Budget aims to meet the challenges posed by Covid-19 and the massive financial impact it has had on the city, while ensuring that the burden on ratepayers is kept as low and fair as possible.
"This not a slash and burn budget but it's also not the budget we had hoped to put out at the start of the year. We have to accept that Covid has changed our financial landscape and change our plans accordingly.
The pandemic changed the financial landscape, causing amended plans. Photo / Brett Phibbs
"However, we will strive to deliver the essential services that Aucklanders rely on and maintain the critical investments in the infrastructure our city needs, and which will play a vital role in stimulating economic recovery."
Goff said the budget would involve:
• Locking in savings of at least $90 million each year for the next three years
• Selling $70m of surplus properties each year over the next three years
• Temporarily increasing borrowing for the first three years before returning to the current level
"Without a suite of measures to counter the $1 billion financial hole caused by Covid, our city will go backwards.
"This increase will allow us to do more in transport infrastructure including addressing road safety, further drought proof our city, continuing our response to climate change, protect our kauri trees and maintain our parks and sports fields," Goff said.
To respond to climate change, Goff said "we are immediately stopping the purchase of diesel buses, enhancing tree planting and reducing black carbon in our city centre".
The $4.4 billion City Rail Link is eating up much of the transport budget. Photo / Jason Oxenahm
Auckland Ratepayers' Alliance spokeswoman Monique Poirier said it is not sustainable for rates to continue increasing faster than wages.
"Frankly, the council needs a bit of slash and burn.
"Its tourism and marketing agency could be abolished, but instead the mayor is spending ratepayer money on rebranding it. He's forging ahead with a gold-plated suite of developments for the America's Cup, even though we won't have international tourists to justify it. And despite all the talk of cutting salaries, he isn't. The council still pays 220 of its staff salaries more than $200,000."
Councillors will consider the mayoral proposal at a finance committee meeting next week before it goes out for public consultation in the New Year.
