Rotorua rates debate: Don Parkes

Daily Post reader Don Parkes asks why Rotorua's rates are among the highest in the country.
About 18 months ago, and in response to widespread concerns about ever- rising rates, the Sunday Star Times commissioned a report on rates throughout NZ. It was conducted by local government finance policy analyst Larry Mitchell and he used figures from Statistics NZ.
He commented that "differing rate levels suggest that some councils may be doing a far better job than others in controlling costs, even allowing for the different levels of infrastructure spend and services provided."
Of the 54 cities surveyed we are fifth from the top, up with the big cities: Wellington 193,000; North Shore 223,000; Auckland 438,000; all cities with a much higher population than us. We are one of only five in the bracket from $2000 to $2632. If we take an average for nine cities on our population bracket, say 50,000 to 80,000 (we are 68,000) we get an average of $1657. We, at $2059, are almost 25 per cent more than the average. Five cities in the survey had a decrease in rates, yet we are facing another rise of 3.1 per cent and today I see Mr Guerin is telling us that 3.1 per cent is not sustainable in the medium term, apparently we must expect more.
A letter to the Rotorua Review from Diane Calder of Hamurana may go some way to explaining that her perusal of the District Plan revealed that the council intends to increase our debt under "changes to capital expenditure" from $150 million to $170 million, for further capital spending. This can only have a further upward pressure on rates.
Mitchell goes on to say that "skyrocketing rate bills are significantly the result of soaring local body staff levels and pay rates. Wages and salaries account for 23 per cent of operating expenses, up from 17 per cent five years ago."
Our CEO Mr Guerin, got a pay increase of $35,000 last year, something that is usually associated with outstanding performance, yet you could hardly justify that by our standing in the rating tables.
If one looks at the airport, something we were told was not going to cost the ratepayer one dollar, and the way some of the issues surrounding that were handled, for instance the cost finally of trimming Mr Fisher's trees, few prizes would be handed out. Quite the reverse in fact.
The net result of the way our city is governed is that we are paying a premium over all our contemporaries, and still being asked for more. The question that must be asked is what sets us apart from other cities. Do we have costs that are unique to Rotorua? Are we overstaffed compared to other cities? How does our wage bill stack up against theirs? Does our CEO have a track record of good financial management? About the time the report by Mitchell was commissioned, there was an article in the Herald about a couple who had lived all their lives in Auckland, complaining that they were being rated out of their home. The well-publicised response from one councillor was that "if you can't afford to live here, go somewhere else". It caused a considerable outcry, outrage even and rightly so.
We are not an affluent society generally. Are we going to wait until we reach this point before demanding answers? The trend is ever upward. It is time our elected representatives were taken to task before we reach that point. It is not unreasonable to ask why we are being rated so far ahead of other similar cities, nor is it acceptable for councillors to say, as one or two have, "what do you want us to cut?" When we are fifth from the top of the 54 cities surveyed, it is time to put our councillors and our CEO on the spot and ask for an explanation or a reduction in rates.
Link: Rotorua District Council CEO Peter Guerin responds