Rates up 3% as council chooses to reduce debt

Hilary Calvert
Hilary Calvert
Dunedin ratepayers face a 3% rates rise for the coming financial year, after a last-minute bid to trim the increase failed yesterday.

Councillors yesterday voted to endorse the increase, subject to final approval next month, after six days of deliberations on more than 1000 public submissions on its 2014-15 annual plan.

The decision came after councillors were asked to choose between extra debt repayment or a lower-than-expected rates increase.

A tough-nosed approach to new spending since last Monday had left councillors with a $345,000 surplus and a rates rise which, if left unchanged, would have stood at 2.72%.

That would have been below the targeted rates increase of no more than 3%, but councillors had to decide whether to take the lower increase or use the surplus to repay debt, pushing rates up.

Cr Hilary Calvert believed lower rates should be the priority, and pushed for a 2.72% increase, saying it would ''send a powerful message'' to ratepayers.

''It would be a powerful message that we are deciding to keep rates down in Dunedin,'' she said.

She won support from Cr Lee Vandervis, but failed to convince the majority of councillors, who instead favoured Mayor Dave Cull's move to use the surplus to repay debt and accept a 3% rates increase.

Cr Richard Thomson said it would be ''superficially attractive'' to keep rates lower, but the saving would amount to ''about 10c a week'' for the average ratepayer.

Accelerating debt repayment would reduce the burden on ratepayers by ''far more'' in future years, and ''that to me is the most important thing'', he said.

''I don't think the political kudos of reducing rates ... warrants abandoning getting that debt down as fast as possible,'' he said.

Others agreed, including deputy mayor Chris Staynes, who said the council had worked hard to get into a position to retire extra debt, and Cr Jinty MacTavish, who said it would be ''remiss'' not to do so.

The decision came after councillors approved responses to each of the 1119 public submissions received, and signed off a list of final civic grants yesterday.

To complete the process, councillors had already been forced to extend last week's deliberations into yesterday to deal with the weight of public submissions.

Even so, they had to adjourn yesterday's proceedings to make time for a full council meeting and public forum, before swapping rooms again to resume their budget deliberations later in the day.

Mr Cull said yesterday's decision was ''a choice between two very good outcomes'', and praised councillors and council staff for their hard work.

''I'm actually very proud of the fact we have achieved that [3% rates rise] and I'm very proud of what staff have achieved.''

- chris.morris@odt.co.nz

A simple change

Steve: The councilors have seemed unable to find a way to not raise rates above inflation for even a single year in the past decade. They are continually growing the DCC's burden on the rest of us with no end in sight.

It's time to put a limit on their spendthriftiness. I suggest that we need a change to the city's constitution that binds it to a 10 year rolling average - simply require that the 10 year rolling average of rates rises (after rates rebates from CCOs)  should not increase above inflation.

To make it easier for the council we'll allow them 0 inflation adjusted increases for the next 5 years as the rolling average kicks in, and we'll allow them to exempt particular projects after a 60% vote of the citizens.

This means that if the council wants a big spend up they either have to cut back somewhere else, or grow the rates base to grow revenue.

Only 3%

Peanuts. Won't even notice that out my pay packet.

Still the most affordable city to live in in New Zealand by a long shot, and the best stadium too! 

Well said

Well said Steve, you are right on the money.

What a farce

So Dave Cull is proud that the DCC has only lifted rates to twice the rate of inflation. That little stroke of the pen has just cost my business an additional $600 per annum on top of the $20,000 in local and regional rates we already pay. On top of that we pay for our water, rubbish removal. Council is nothing to us but a parasite sucking the financial life blood out of this city.
Council talks of getting business to come to Dunedin whilst at the same time loading more and more costs on those considering setting up here. At the same time they sit on the side lines as their own ratepayers are forced to compete with the non-ratepaying university competing unfairly against local business without the impost of sky high rates.
Succesive councils have taken this city from having almost no debt in 2009 to now carrying a consolidated debt of at least $625 million and rising. Millions wasted, on a stadium, DVML, Carisbrook, Chinese Gardens, and the non entry fee Settlers Museum. They even spent a million dollars putting a train in a glass cabinet. One financial disaster after another.
Our mayor has nothing whatever to be proud of, this council is a joke, incapable of running what is a multi million dollar business. Next year will be no different - rates will continue rising at twice the rate of inflation. Just wait until the stadium review is released. That financial shock is still to come, conveniently put off until after this round of rate hikes.

Pass or fail? Definitely fail

The DCC doesn't seem to understand the relationship between the CPI/RPI and their own rates increases.  When, we ask, was the last time there was a rates decrease, or even one under the level of inflation?

We had a DCC building inspector here a while back who told us in conversation that he reported to a manager, who reported to a manager, who reported to a manager, who reported to the CEO.  All this in an organisation of about 600 people!  We used to have structures with this number of layers in organisations of 100,000 staff.  

I agree that DVML and that stadium thing, and all the other capital projects of the previous administration were either badly conceived or badly timed, but it isn't just about them.  If we want to look at value for our rates, amongst other things we'd better start scrutinising this kind of questionable structure more closely. 

Annual letter

Dear DCC

We are unable to find the money for this year's rates bill, however, we are able to offer you 7 cents in the dollar as long as you use stump up a few hundred thousand of your other, paying, ratepayers'  money to cover our running costs such as wages, hospitality and anything else we see fit to spend it on.

Yours 

DVML

Questions, questions

Every million spent is another 1% on the rates in broad terms.  How much money has gone on bailing DVML out since they have been running?  Does anyone seriously see an end to this financial toilet bowl?  And the DCC seem pleased at their efforts.  Can you imagine how nice it would be if only those that had promised millions in supporting the new rugby stadium had paid up?

Keeping silent

That bulky pachyderm in the Annual Plan room isn't mentioned. The outcome of the stadium review is yet to be lumped on council budgets. Lest we forget, the temporary patch on DVML (and professional rugby) through the annual plan process is likely to be the least of it. Unsurprisingly, the "very proud" mayor isn't telling ratepayers and renters the whole story.

A different headline

The rates wouldn't be going up this year if the city didn't continue to pass money to the financially incompetent DVML, bailing them out year after year.

Why not change the headline to say "rates go up this year to bail out DVML again".

3% is double the current inflation rate

3% is double the current inflation rate and this is on top of  the massive rates increases in recent years. Ratepayers suffer yet again from Council greed. Some serious belt-tightening is long over-due.

Awesome

Well done DCC!!! Thank you for NOT listening to anyone other then your own hungry wallets! Owning your own home is considered to be every kiwis dream, I feel it's every Dunedin-ites living nightmare now.

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