A spendthrift tendency

Track Dunedin City Council rate increases over the past 15 years and a pattern emerges.

As expected, most increases outstrip inflation levels.

Councils have complained about being saddled with more responsibilities, major infrastructure upgrades have been required and it is the nature of local government to spend more and more. Empires built on other people's money will expand without assiduous and active watchdogs.

But less obvious is the effect of elections.

Every three years the mayor and the councillors go before the electorate and each election year they seem to try that much harder to subdue spending increases.

In the in-between years, they appear to be influenced more by the special interest groups and managers who press, through the annual plan and through public submissions, for their "worthy" causes and their "essential" spending.

The system itself these days means that councillors and mayors without sufficient fortitude will concede to the pressures.

Since 1997, the city rates increases (with election years in italics) have been 4.9%, 2.5%, 5.7%, 5.1%, 2.9%, 1.9%, 2.9%, 2.8%, 8.5%, 5.5%, 6.4%, 10.4%, 7%, with a proposed rise this year of 5.2% and for next year of 8.9%.

The local body elections are in October so it should not surprise that the current proposed increase has been trimmed, while the post-election prospects for ratepayer purses are bleak.

While councillors might claim to have had little room to manoeuvre today, it will be especially tough for the next council in 2011.

Over these 15 years, the average rates increase after an election is 7.08%, in election year the average is 3.96%, and the figure for the middle year is 5.08%. The one exception to the post-election spike was in the 2002-03 year, when the rates rose by their smallest amount over this period, 1.9%.

One way to cushion and postpone rates increases is through borrowing, and this helped ameliorate the increase for several years. But interest on such debts must be paid and pay-day is arriving fast.

In order to improve the look of the figures, councillors are also trimming depreciation allowances, but the inflow of depreciation money will be essential for paying for services in the future, such as the huge amount needed for water-pipe replacement.

And the scale of rate increases would have been even worse if it was not for the hefty hikes in the amounts extracted in the form of "dividends" from the council-owned companies.

Finance from the Waipori fund from the sale of the Waipori power stations and additional "user pays" income has also helped curb increases.

Councillors clearly are looking towards the elections already and they must be aware of the unprecedented level of disquiet about the rates rises and spiralling debt they have overseen.

Most, including those who are now trying to distance themselves from the extra commitments and singular spending programme of recent years, must take their share of the responsibility.

Few have displayed the vigour required to curb a burgeoning bureaucracy, or the courage to say "no" while bearing in mind the city's demographic.

They should all remember, nevertheless, that the public does not desire to be represented by men and women who are bitterly negative.

The results of the last elections indicated that.

Many voters recognise that Dunedin cannot stagnate and that a judicious and strictly limited choice of big projects was, and is, reasonable and even necessary for the city's growth and vibrancy - and that will mean rate rises ahead of inflation.

At the same time, voters expect a frugal council to efficiently keep to its core functions, with minimal spending in discretionary areas.

It is here that councillors, once again, have failed to be prepared to say "no".

In the months leading to the poll later this year, voters who are worried about the state of the city's finances - as they should be - should focus on the election of a leadership that recognises these facts while also being positive about what the city has to offer.

It is possible for a council to be dynamic and uplifting without relying on the crutch of big spending, and it is possible to oppose "thinking big" without destructive cynicism.

Dunedin is a small city perfectly placed to make the fullest advantage of its extraordinary location and amenities (and the new stadium will, for better and worse, be part of that).

But Dunedin cannot supply all the facilities and services of a bigger centre, and its mayor and councillors - as well the voters - will have to recognise that hard fact.

 

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