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.