The Dunedin City Council’s 9.8% draft rates increase and its projected ballooning debt are a shock.
Over the years, the council has — mostly — steadily increased rates while also projecting, through its long-term plan, substantial further rises. Sometimes, however, in the distance is the promise of ameliorating increases and stabilising or falling debt.
Not this time. The debt keeps going up at least to 2031.
Go back about a decade and there were several large rates rises. Vigorous efforts were made, subsequently, to reduce the increases and even to begin to pay back debt.
Now, capital spending is set to hit $1.5billion, which could force debt up to $869million by 2031.
Despite those earlier promises, ratepayers find the costs, the needs and what the council thinks it should support have expanded once more. Ratepayers again are told about a huge backlog in unfunded water and sewage infrastructure replacement.
To be fair, infrastructure replacement and construction are a massive problem all around the country. Debt and rates will rise because of it, even as the Government examines the issue and looks at national structures to manage the matter.
This makes it even more imperative councillors and the chief executive tackle underlying and other council expenses.
This is a never-ending process. Areas of council work regularly must be examined and changed and/or trimmed as possible. New structures and work practices will be needed. Productivity must improve.
Instead, the tendency is to add staff numbers and increase salaries. Managers have incentives to increase their roles and their staff. And councils, by their nature, are not driven by profit imperatives and the risk of going out of business.
Layers of bureaucracy and complex processes and compliance add to the basic expense. A little bit here and a little bit there in various ways cause costs to creep up.
The council must be lean, efficient and clever, and councillors must always have that in mind.
At the same time, it should be accepted as well that the city cannot stand still. Scorching the earth will not help the city prosper nor make it an attractive place to live. Spending must go on, and — shrewdly targeted — it is beneficial.
But can the council, for example, deal with social problems that should be the responsibility of central government? Can ratepayers subsidise social housing? Can ratepayers, beyond the specific issues faced by Dunedin and South Dunedin, pay towards wider climate change initiatives and policies and policy development? Can the council spend tens of millions on transport changes that might not prove effective in a small city?
The commitments have been made, and the South Dunedin community hub and library is going ahead. It is extremely nice to have. But should the city really have afforded the capital and ongoing costs?
Perhaps behind the 9.8% and the looming $869million debt, in part, is that old trick in the book so that ratepayers breathe a sigh of relief when the final figures are high but not quite so frightening. Perhaps not, though. There is a lot to spend money on.
While other cities are facing large increases, imagine the outcry by Auckland ratepayers at almost 10%.
As well, councillors in the coming months still face all the worthy public submissions that will flood in seeking council support and funding.
It is all too easy for councillors, especially if they are at all spendthrift, to spend other people’s money, to play benefactor to city organisations and causes.
Councillors must make tough calls and be hard-headed. Although they can do little about water, stormwater and sewerage costs, they can do their very best in every other area.
It is at annual plan time their skills and determination are really called on, that they really earn their salaries.