Wellington plans to ‘pay’ for projects by doubling debt

If i was a Wellington ratepayer I’d be worried by this (actually I’m worried as a Dunedin ratepayer about similar increases in spending and rates).

Stuff: Wellington City Council set to double debt to pay for big projects

Wellington’s desire for a movie museum, a pricey indoor arena, and its need for resilience, will bump the city’s debt to more than $1 billion for the first time.

Wellington City Council’s debt level is set to rise from $507 million to $1.16 billion over the next 10 years to pay for investments such as water reservoirs, earthquake strengthening the Town Hall, Let’s Get Wellington Moving, cycleway infrastructure and the arts.

Councillor Andy Foster was concerned the council was proposing to more than double the amount it borrowed and was warning ratepayers it will cost them in interest payments.

Wellington Mayor Justin Lester said he was comfortable with the proposed investments over the next decade.

Some of the budgeted investments were not only warranted but necessary, he said.

Some will certainly be necessary, but others sound like they are optional and possibly extravagant.

Council chief executive Kevin Lavery said the proposed level of debt was prudent and affordable and significantly lower than the average mortgage level for New Zealand households.

Equating it to “gthe average mortgage level” is cute, but people will be more interested in the impact on their rates, which they pay on top of their mortgage.

The council had a strong balance sheet, which meant it could borrow now and spread the costs of the major projects over the lifetime of the assets, he said.

“Simply, it means we can propose keeping rate increases to less than 4 per cent.”

Suggested ates seem to be all over the place. In February: Wellington City rates sitting at 4.5 per cent increase – mayor wants to trim more fat

Wellington Mayor Justin Lester said if the council did not make the cuts, residents would have faced a 7.1 per cent increase in 2018/19 to pay for big ticket items, such as the Town Hall restoration and Sir Peter Jackson’s movie museum.

Trimming the fat had whittled it down to 4.5 per cent but his ambition was to get it down in the 3 per cent region and keep it consistent over the next decade.

Now it is “under 4%” – and doubling debt.

“We want to keep Wellington more affordable by looking closely at what we are spending … I want to get the rates down by [saving] about $10m.”

And by adding half a billion dollars of debt.

26 Comments

  1. David

     /  April 2, 2018

    “investments such as water reservoirs, earthquake strengthening the Town Hall, Let’s Get Wellington Moving, cycleway infrastructure and the arts.”

    Investment means a return. I can see most people seeing the value in a water reservoir, everyone gets a benefit from it. Yet, borrowing money to spend on a cycleway and the ‘arts’ seems like a lot of money going to a very small interest group.

    • Kitty Catkin

       /  April 2, 2018

      If money isn’t spent on things like water now, it will cost more when it needs to be mended later. Wellington is well endowed with the arts. A film museum would be wonderful, I’d love it, but not if it means doubling the debt.

      Hamilton spent ???$ on revamping the then lovely Garden Place in the city centre. Trees and grass ? Boring. Seats with backs and sheltering walls ? Don’t be funny. The lovely ‘Peace Wall’ that gave character and acted as a shelter ? Put it somewhere useless. Much/most of the grass gave way to pavers, shade trees came down with a token few left, they put in muzak to annoy people (the number who use Garden Place has noticeably gone down) There are seats like something in a bus shelter, hardly any shade and no character, They put in a petanque thing that nobody used,

      All this was done just a few years ago, Now the council wants to spend $3,000,000 redoing it and adding a playground.

      • Kitty Catkin

         /  April 2, 2018

        They must think that it’s not noisy enough with the muzak,

        They put in a hideous stage for live music, always played at earbursting volume. Poor Garden Place !

  2. Corky

     /  April 2, 2018

    What would Robert Kiyosaki do?

    • David

       /  April 2, 2018

      Sell a conspiracy theory book to financially illerates while pretending it’s a book on personal finance, then leverage that into pressure cooker, get rich seminars that he charges $20,000 a pop. Claim it’s all an ‘investment’.

      • Corky

         /  April 2, 2018

        You are being a little harsh on Robert. He stated you can make a financial statement read anyway you want it to. Ain’t that the truth. Unfortunately no record of poor dad or rich dad has ever been found in Hawaii. It’s believed poor dad was created when he went bush to find himself.. and find the path to financial freedom

        Seems like decent qualifications for becoming a consultant to Wellington Council.

        • David

           /  April 2, 2018

          ” He stated you can make a financial statement read anyway you want it to. Ain’t that the truth. ”

          No it’s not. If you do believe this, then you are going to have some very depressing discussions with Inland Revenue and thereafter, a judge.

          “Unfortunately no record of poor dad or rich dad has ever been found in Hawaii. ”

          Poor dad was Kiyosaki’s father, at least that is what his book says.
          Kiyosaki’s comment on ‘Rich Dad’
          “Is Harry Potter real? Why don’t you let Rich Dad be a myth, like Harry Potter?”

          The issue being that he sells his book as non-fiction…..but it does sum up his book well, Harry Potter does Personal Finance.

          “Seems like decent qualifications for becoming a consultant to Wellington Council.”

          Borrow half a billion for a movie museum and ‘art’ and call it investing, Harry Potter indeed.

          • Kitty Catkin

             /  April 2, 2018

            I hated the way that he despised & sneered at Poor Dad and praised Rich Dad. If Poor Dad was his real father, he must have been gutted by this book. Being a great parent has nothing to do with money, poor and rich parents can be vile parents or wonderful ones.

            • Corky

               /  April 2, 2018

              Please don’t tell me you have read the book, because I doubt it.

            • Kitty Catkin

               /  April 2, 2018

              I wouldn’t know about his treatment of the dads if I hadn’t. As I remember it, his own father was mocked for being poor and someone else’s adulated for being rich. Was that the book where he praises himself for making a fortune from buying houses in mortgagee sales ?

              I didn’t buy the book, it was in the library.

              Please don’t assume that people are lying, it is offensive.

            • Corky

               /  April 2, 2018

              He didn’t mock his real dad ( a teacher I think).But he was critical of his financial ignorance and inability to escape the cycle of living from paycheck to paycheck.

              I don’t assume anything with you. But given our history and some of your dubious claims I think it was a fair call. Why would anyone interested in good literature even contemplate reading a B grade paperback author of dubious repute?

            • Kitty Catkin

               /  April 2, 2018

              You said that you doubted that I had read it, You have just mentioned my ‘dubious claims’, which is calling me a liar. I have never made a claim here that wasn’t true, and your use of these words is obviously intended to be offensive. NB, calling someone a liar could land you in trouble with the law if you do it without hiding behind a pseudonym. Please do not do it unless you know that something is a lie. It’s bad manners, apart from anything else.

              Don’t do it again unless you want me to ask to have you moderated which I have hitherto refrained from doing. There is a limit to the number of times anyone will put up with a false accusation.

              He did sneer at his real father and the idea that someone should stay at school and get good marks.

              It didn’t sound as if you thought those things about him when you wrote about him before.

            • Kitty Catkin

               /  April 2, 2018

              In NZ, we call them cheques, not checks.

            • Corky

               /  April 2, 2018

              [Deleted. Far too personal, and you should know better, you’ve been warned often enough. What I do about this will depend on whether you see fit to retract and apologise and whether you make assurances about future behaviour or not. I have to be able to trust people here to abide by some fairly simple non-abusive guidelines, especially regular commenters. PG]

            • Kitty Catkin

               /  April 3, 2018

              MOD ! I am tired of having things attributed to me that are total falsehoods by this troll. Most of the things about me here are lies, insults and/or gross misreprensations, not to mention being grossly intrusive, and there comes a time when one has to act.

              MOD !

            • Kitty Catkin

               /  April 3, 2018

              MOD – please – this is above and beyond anything that anyone should have to put up with by way of intrusive trolling.

            • Kitty Catkin

               /  April 3, 2018

              MOD – please – this is above and beyond anything that anyone should have to put up with by way of intrusive trolling.

              To anyone reading the trolling, I am sure that I don’t need to say that none of the ‘serious stuff’ about me and the ‘alleged late husband’ is anything but a vicious and despicable distortion of the truth. Particularly despicable when a dead man is attacked – trolling sinks to new depths.

            • Corky

               /  April 2, 2018

              ”Why would anyone interested in good literature even contemplate reading a B grade paperback author of dubious repute?”

              Why indeed?

            • phantom snowflake

               /  April 2, 2018

              Corky: Escalating your vendetta in this way cannot possibly end well. For you. As for damage limitation; your best bet is to email Pete and ask him to remove your comment and just suck up the resulting hit to your ego.

            • Kitty Catkin

               /  April 3, 2018

              That’ll be the day. It’s beginning to feel like obsessive stalking, to be honest, and rather creepy. I know that this troll can’t find out who I am and where I live, but if by chance he did I would take immediate action .

          • Corky

             /  April 2, 2018

            ”No it’s not. If you do believe this, then you are going to have some very depressing discussions with Inland Revenue and thereafter, a judge.”

            Ever wondered how finance companies got away with things for so long?
            And not only finance companys.

            “Unfortunately no record of poor dad or rich dad has ever been found in Hawaii.

            You are correct about poor dad. I got mixed up there. It should be the other way around.

            ”Kiyosaki’s comment on ‘Rich Dad’
            “Is Harry Potter real? Why don’t you let Rich Dad be a myth, like Harry Potter?”

            There’s a couple of people on the net who really took a dislike to Kiyosaki. They searched high and low for rich dad. They did that because ‘Kiyosaki’s for a long time wouldn’t confirm rich dad wasn’t real. The above statement came later in the piece.

            As a coincident, I have just given away four books I had of his ( some in co authorship) Personally, I would recommend them ( especially the first) to people seeking to understand personal finance..albeit with certain caveats. For example his favourite saying: ”the rich get richer, and the poor get poorer” is arrant bullshit. However, he gives some sound information amongst the bs. He did actually start a company if I remember correctly( making bum bags). But then went on to bs about investment banking and buying major investments.

            ”Borrow half a billion for a movie museum and ‘art’ and call it investing, Harry Potter indeed.”

            I agree.

            • David

               /  April 2, 2018

              “He did actually start a company if I remember correctly( making bum bags).”

              Velcro wallets.

            • Corky

               /  April 2, 2018

              That’s it. and something to do with surfing.

            • Kitty Catkin

               /  April 2, 2018

              Are you rich from following this egomaniac’s advice ?

            • Corky

               /  April 2, 2018

              No, but I learnt some simple truths that are so simple I overlooked them.
              However, please read my post above. I’m assuming your question was for me.

  3. Trevors_Elbow

     /  April 2, 2018

    Rate payers need to organise and refocus councils on what they are really there for 3 Waters and local roading plus Libraries, Parks & Reserves.

    Things like Movie Museums? Zealandia? Hmmmmmm will be or are wonderful attractions.

    BUT thinks like water reservoirs that can supply the population post earthquake should be much more a priority.

    Cycleways – hmmm. Island Bay residents loathe these as do the local shopkeepers. Unmitigated disaster the Island Bay Cycle way

    The problem is – local government has no adequate check on its spend and tax philosophies, the local Councillors are all about re-election and pressure groups have large sway in voting due to abysmal turn out, and councils are allowed to prioritise spending meaning infrastructure spends can be delayed to allow vanity projects to proceed

    Its about time the Government appointed a Local Body Royal investigation with a remit to assess performance against 3 Waters, roading, libraries and Parks & reserves to assess value for money, efficiency, corruption. I am sure that such an investigation would find some “wonderful” practices happening – particular if coupled with a well funded Auditor General one off task force going through all major cities IT, roading, parks etc contracting practices in detail (Penny B has a point about corruption in the contracting processes I believe) with the SFO being feed the suspicious activity identified.