Iwi seats on Otago Regional Council

The Otago Regional Council has voted in favour of reserving committee seats for Ngāi Tahu. This has been referred to as “exciting” and also as “racist”.

I’m more concerned about “alarming” rates rises.

ODT on Monday (before the vote): Reaction mixed to ORC seats for iwi

The idea of non-elected iwi seats on an Otago Regional Council committee has drawn councillor responses from “racist” to “exciting”.

Cr Michael Laws has blasted the move as an “assault upon democracy”.

“It is so privileged, and so obviously racist, that it calls into question the fundamental principles of democracy in Otago.”

The decision would empower an “unelected minority”.

“It is a recommendation that embraces all the PC nonsense of our age but misrepresents both logic and law in advancing such racial privilege.”

Cr Bryan Scott said the principle of having iwi at the table was “exciting”.

“My personal view is we always need to strive to do better with iwi and this is a way of doing that.”

They would represent two seats out of 14 and all decisions would have to be ratified by the full council, he said.

“Ideally, they can add value and we can discuss things face to face. The outcomes will be better for our community.”

Stuff (after the vote): Otago Regional Council votes in favour of reserving committee seats for Ngāi Tahu

A controversial move to give local iwi two seats has passed, despite one Otago Regional councillor claiming it promotes “racial privilege”.

Councillors voted seven to three in favour of devoting two seats on the council’s policy committee to Ngāi Tahu, a move chairman Stephen Woodhead said was a “win-win”.

“They will look for people with [Resource Management Act] expertise and able to assist us around this governance table.”

Councillor Michael Laws, who represents the Dunstan constituency, criticised the council before Wednesday’s meeting for being undemocratic and advancing “racial privilege” by reserving the seats for iwi.

Deputy chairwoman Gretchen Robertson, who chairs the policy committee, said it was a beneficial move for the council.

“We make important decisions for our community in the space of land, air and water … How can we speak for iwi? We must hear first and face to face.”

Councillor Michael Deaker, who supported iwi representation, said bringing iwi around the table was “lawful, democratic and desirable”.

“We have had dozens of people, mostly North Islanders who probably don’t know where the Dunstan constituency is  … dog-whistled in and [they] have showered us with words like undemocratic, criminal, racist, ‘unethical left-leaning PC control freaks’ … it’s all quite stunning.

Councillor Graeme Bell, who voted against the recommendation, said his Dunstan constituency told him iwi were needed in the room, but should not have voting rights.

He called for Māori candidates to put their names forward in the upcoming local body election.

Cr Ella Lawton supported the motion, but said the process had been “terrible again”.

Lawton proposed a review of the 2003 memorandum of understanding with local iwi, which was adopted following Wednesday’s vote.

Laws said he was opposed to the representation proposal because there had been no consultation and there were financial implications.

“This isn’t some biosecurity emergency like wallabies – this is policy. We should have put out a draft plan and be consulting on it right now and getting public feedback but no, we aren’t going to do that.”

I’m ambivalent. I haven’t really thought much about it and what it might mean. I’m not aware of any public engagement on this.

We get to have our say at the local body elections later this year.

My biggest concern with the ORC is the rampant rate rises – Increase of 26.9% for ORC general rates

Otago Regional Council general rates will jump 26.9% and not be subject to formal public consultation.

That sounds terrible.


A cartoon on the iwi seats is bound to be controversial.

Dene is ex-political editor of the ODT.

How will local body taxes solve council spending escalation?

Local body rates have already been climbing well ahead of inflation. They are predicted to rise another 50% over the next ten years in the major cities.

So local bodies are looking at other ways of getting revenue. That doesn’t solve the escalation in spending, but I guess it makes it easier for mayors and councillors to divert from broken rates rise promises.

In the weekend Local Government New Zealand

Substantial review of local government funding welcome and needed

Local Government New Zealand is pleased with the terms of reference for the Productivity Commissions’ forthcoming inquiry into local government funding and finance which were launched by Minister of Finance Hon Grant Robertson at its annual conference in Christchurch this afternoon.

LGNZ President Dave Cull says that the current way of funding local government doesn’t provide the means to invest for growth and development, particularly given the diverse challenges facing communities.

“Our regions, cities and districts shouldn’t be entirely dependent on central government to resolve the complex issues that we are now facing – it is essential that we empower local authorities with access to funding and financing tools to make a difference,“ says Mr Cull.

Local government has been calling for a significant review of local government funding since 2015 when LGNZ first released its Local Government Funding Review and 10-Point plan: Incentivising economic growth and strong local communities.  The review found that the heavy reliance on property rates to fund local services and infrastructure failed to incentivise councils to invest for growth, which is necessary to provide the additional income to deal with issues such as infrastructure improvements and the pressures from climate change, extreme weather events and the impact of tourists on infrastructure.

“Local government is critical to the overall wellbeing of New Zealand’s communities and the way in which councils are funded influences their approach to new investment.  If the only funding sources are property based taxes then the ability and incentive to fund long term growth investment is limited.”

So local bodies want more alternatives to property based rates. Auckland City Council has already got approval for a fuel surtax, and other local bodies are considering having one too. How long will it be before just about everyone pays a local body fuel tax?

Mayors and councils are struggling to keep rates rises below eye watering levels.

LGNZ President Dave Cull’s own Dunedin council has big plans – rates wise. See 7.84% rates rise “a normal part of the cycle and 60% rates rise proposed.

And this is level of planned rates rise is common.

Stuff – Rate rises continually outstrip incomes and inflation – do they need an overhaul?

Analysis by Stuff found that over the coming decade ratepayer bills in five main cities will, on average, increase by 50 per cent.

As well as everyday council expenses, these increases will contribute to major projects – for example, $253 million for a new stadium in Christchurch and $311m for pest and disease control in Auckland.

Exact comparisons are difficult because of variations in the way rates are calculated, what they include and when rating valuations of properties are carried out. But indicative figures provided by the councils for average house prices suggest Hamilton and Christchurch ratepayers will see bills surge by around 53 per cent by 2028, and those in Wellington by 48 per cent.

Auckland rates will rise 38 per cent, and Dunedin by 59 per cent.

Rates for 2018/19 rose across the board on July 1, from 2.5 per cent in Auckland to 5.5 per cent in Christchurch and 9.7 per cent in Hamilton, against a backdrop of 1.1 per cent inflation.

But it is likely to be worse.

TEN-YEAR RATING FORECASTS ARE ‘BEST CASE SCENARIO’

Gough has an ominous warning, at least for Christchurch – that the annual increases outlined in the long-term plans are far from fixed in stone.

“Every year we do an annual plan, and I have never seen one where the rating increase is less than what’s projected.

What seems to happen is councils warning of a large rates rise, finalising a slightly less large rise and claiming that is a reduction.

Cull believes there is an over-reliance on property rates to fill the coffers, the 60 per cent of council income they provide far exceeding that of other developed countries, and that putting them up year after year in the face of sluggish wage rises is not sustainable.

He is a proponent of local taxes as an alternative funding tool – sales taxes, GST, a local income tax or the like.

That makes taxes even more complicated, and will presumably end up with variations between different councils and regions.

But all this focus on alternatives for raising local body revenue misses a fairly large point – why is expenditure going up so much?

It sounds like 50% rates increases are inevitable and mayors just want to disguise where their revenue comes from.

Broken rates rises promises make for embarrassing election campaign fodder.

Alternatives to rates should certainly be considered, but I wish as much effort was put into containing expenditure.

A plethora of regional taxes may help mayors and councillors, but it will still cost us all one way or another – probably more given the costs of administering a complexity of taxes.

Back to the Stuff headline: Rate rises continually outstrip incomes and inflation – do they need an overhaul?

What about ‘Spending rises continually outstrip incomes and inflation’?

Otago regional rates to rise 21%, then 23%

This is a bit of a shock – ORC plan adopted, rates to rise 21.1%

A 21% rates rise is on the cards as the Otago Regional Council finalises its long-term plan.

But wait, there’s more.

General regional council rates will rise 21.1% in the next financial year and are predicted to rise another 22.8% the year after.

Targeted rates will rise 5.4% in the next financial year and 5.7% the following year.

That means that rates of say $200 now would rise to $330 over four years.

The plan includes about $650 million in spending over the next 10 years and tackles new projects such as increased water monitoring, urban water quality initiatives and better preparing the region for climate change.

The cost of going green?

Also in the ODT today: Plans for $200m hotel complex

That’s plans for a hotel in Queenstown. Probably instead of a proposed hotel inn Dunedin, which once again faced vocal opposition and planning approval difficulties.

The man behind a so far unsuccessful bid for a five-star hotel in Dunedin’s Moray Pl has moved his attention to Queenstown.

An Environment Court appeal over his Dunedin five-star hotel planned for a site across the road from the Dunedin Town Hall was withdrawn last month, but he indicated at the time he was not giving up on the project.

Sounds like he has given up on Dunedin, like developers before him.

 

7.84% rates rise “a normal part of the cycle”

Saying that a 7.84% rates rise will be “in the lower quartile” won’t mean anything to ratepayers who face increases of $200-400. I am horrified by this level of increase – and it sounds like it is what much of the country should be expecting.

ODT: DCC approves second highest rates increase since 1989

The Dunedin City Council has backed a higher-than-expected rates rise of 7.84%, after agreeing to a series of last-minute funding boosts yesterday.

Plus:

The council has also signed off on a 4% increase in most fees and charges.

The waffle:

But Mayor Dave Cull insists the rates hike, like the fees and charges, are just a normal part of the cycle as cities invest in their futures.

That was within the council’s new self-imposed rates limit of 8% for the first year.

That’s about four times the rate of inflation.

Council chief executive Sue Bidrose said the city’s rates would remain in the lower quartile, while other centres across the country eyed increases of between 3% and 15%.

Lower quartile, about average, that’s tosh when trying to make excuses for an increase of about 8%.

It’s not as bad as 15%, but that’s like saying it’s not as bad getting two teeth pulled by the dentist as getting four teeth pulled.

Mr Cull said cities went through cycles of investment, leading to periods of higher rates increases, but the alternative would be worse.

Those cities that kept rates artificially low by not spending in the short term were eventually forced to catch up, leading to ”massive rates increases” later, he said.

”They pay the price in the end. The idea is to try to keep it smooth, but every now and then you have got to invest,” he said.

More nonsense. I think that rates have been rising ahead of inflation for yonks.

This is budget day news. I don’t expect to get any joy from the Government today either, but the budget shouldn’t be this bad.

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.

60% rates rise proposed

It’s not uncommon for mayors and councils to play down rates rises. Like this:

Wellington Rates Snippet.png

Gwynn Compton:  Spin cycle shrinks rates as well as clothes

But for Wellington City Council, an attempt to spin the merits of reducing a potential 7.1% rates rise down to 3.9% has ended up with an announcement that they’re reducing rates down to 3.9%, which would be a 96.1% cut!

In this case, the words “rise” or “increase” appear to have been omitted from the article.

In contrast, in the ODT today:  Rates must rise to maintain momentum, mayor says

Dunedin faces a 7.3% rates rise as the Dunedin City Council eyes a decade of increased investment, but Mayor Dave Cull says it is essential for the city to keep riding a wave of activity.

Mr Cull was commenting before today’s start of public consultation on the council’s latest 10-year plan, which outlined proposed spending for the decade to 2028.

However that is a bit misleading too – the 7.3% rise is proposed for the first of ten years. More detail:

Rates would rise by 7.3% in the 2018-19 year,
by 5% the following year,
and by 4.5% each year
until 2027 when the increases would drop to 4%.

That amounts to about 60% over ten years.

Modest rates of $2000 would rise to $3190 after ten years.

2018   2,000.00
2019 7.3%   2,146.00
2020 5.0%   2,253.30
2021 4.5%   2,354.70
2022 4.5%   2,460.66
2023 4.5%   2,571.39
2024 4.5%   2,687.10
2025 4.5%   2,808.02
2026 4.5%   2,934.38
2027 4.5%   3,066.43
2028 4.0%   3,189.09

And that is without any knowledge of future inflation, which would presumably add to the increases.

The council had come out of a period of austerity, during which rates increases were limited to 3% and spending was cut, as the focus shifted to driving core council debt down below $230 million.

Rates had still risen faster than inflation over the last ten years.

At the same time, core council debt – excluding companies – was forecast to climb from just over $200 million now to $285 million by 2028.

So debt is forecast to rise despite the large rates rises.

Not helping, from ODT at the same time: Tender troubles mean more delays for cycleway

Dunedin City Council staff have voiced frustration after a call for tenders to complete an Otago Peninsula safety improvement and shared pathway project came in $20 million over an already-inflated budget.

The council last year announced a revised budget to complete the project alongside Portobello Rd and Harington Point Rd, which rose from an estimated $20 million to $49 million.

This is not the first ‘shared pathway project’ (cycleway) where the costs have blown out.

So even with large rates rises there must be little confidence that the ‘increased investment’ wouldn’t increase substantially more.

This was Mayor Cull’s pledge last election:

In the six years I have led our Dunedin City Council we have reduced rate increases.

That’s much like the Wellington example above – rates increases were ‘reduced’ to above inflation.

I wonder how what he will pledge if he stands again in next year’s local body election.

Auckland rates jiggery pokery

Auckland ratepayers could excused for being bamboozled by their rates and taxes and levies.

Mayor Phil Goff is claiming he is fulfilling a promise to keep rates rises below 2.5%.

RNZ: Auckland ratepayers could face 6.2 percent hike

Mayor Phil Goff has unveiled an ambitious mix of new rates, revenue-shifting and even council asset sales to boost the spending on critical infrastructure.

Mr Goff has defended the proposed changes as being in line with his election pledge of keeping general rates rises at 2.5 percent.

“It’s exactly what I promised – I said to people right across the community I want to get rid of the interim transport levy that’s costing everybody regardless of how often you use the roads, and replace it with a regional fuel tax,” he said.

The rating cake has new layers, built on a basic general rate rise of 2.5 percent, as Mr Goff pledged in his election campaign. The 2.5 percent is proposed only for the next two years, then rises to 3.5 percent.

But it is not that simple.

An additional 2.8 percent would come in a water quality targeted rate, aimed at accelerating significantly some big infrastructure projects to clean waterways and beaches.

Another 0.9 percent is added by a natural environment levy to deal with threats such as kauri dieback, possums and weed infestations.

Those rises are partly offset by ending, as scheduled, the Interim Transport Levy of $114 on households and $183 on business.

For an average priced home around $1 million this will slice 4.8 percent off the higher rates, leaving an overall increase of 1.4 percent.

That percentage increase will rise progressively for homes valued higher than $1m, and decrease for cheaper homes.

However, that levy will then be replaced by a 10 cent-a-litre regional fuel tax, which the government has told RNZ should be in place in time for the council’s next budget mid-2018.

It seems that few if any ratepayers will pay less, or less than 2.5%, and some will pay disproportionately more.

An additional variable is the impact of recent property revaluations, which affect how big a share of the city’s rates burden is apportioned to each property.

Many lower-priced suburbs in the west and south already face higher than average rates rises because of that process, and extra costs could be imposed via the proposed 6.2 percent increase, and the cost of the fuel tax, if they cover high mileage.

There will be ‘consultation’:

Aucklanders will be asked their views during consultation early next year on the budget, but will struggle to get a clear picture of how they are directly affected.

It looks likely many will struggle to understand the convoluted changes, and some may have real trouble paying for the increases.

Just as well everyone will get tax relief which is legislated to take effect from next April – oh, hang on, the Government are scrapping that.

Dunedin decline

Dunedin has been in decline relative to cities up north for a long time. The 1980s and 1990s gutted the public service out of the city and it has struggled since.

Most major industry has gone. Freezing works are no more, Fisher & Paykel, which took over Shacklocks in the 1950s, shut their factory in 2008. Several years ago Hillside Workshops were shut down, and the Cadbury chocolate factory is set to close next year.

There are two things keeping the city from major decline – tertiary education, chiefly University of Otago (the oldest university in New Zealand, established in 1871),  and tourism, largely due to the growth in cruise ship visits.

The current city council, led by mayor Dave Cull, seems more intent on creating a green cycling city than on economic development. Whole blocks of car parks are being removed and replaced with barely used cycle lanes, with many more proposed.

The city has a reputation for being unfriendly to development. I have heard that developers don’t even try to set up in the city.

Several years ago a major waterfront hotel was proposed. It was slapped down by public opposition and regressive city planning practices because it was deemed to be too big,

Another major hotel development was proposed last year and has applied for consent, but it looks like that will also be slapped down.

ODT: Decline hotel consent: report

A planning report is recommending consent for Dunedin’s latest five-star hotel be declined.

The report, made public late this afternoon, has cited the hotel’s height, visual dominance of surrounding heritage buildings and shading impact as key reasons to decline consent.

A planning report is recommending consent for Dunedin’s latest five-star hotel be declined. The report, made public late this afternoon, has cited the hotel’s height, visual dominance of surrounding heritage buildings and shading impact as key reasons to decline consent.

Too big too. Probably not enough cycle parks.

The recommendation to the panel of independent commissioners came in a report by independent consultant Nigel Bryce, ahead of the public hearing beginning on July 31.

I expect there will be a lot of submissions in opposition, this will be cited as majority public opposition, and the project will be dumped.

There  has been a practice in Dunedin of small lobby groups stacking submission processes and claiming majority support for their opposition to development. They can do this as part of the democratic process, but it is not a democratic measure as they claim.

Recently:

Despite an extra $100,000 of spending approved this week, the Dunedin City Council scraped in under its self-imposed 3% target for rates rises for the next financial year.

The council approved a budget that will see ratepayers asked for an extra 2.99% for 2017-18.

That’s again higher than inflation.

Mr Cull said some people had reservations about the annual plan process, which featured feedback meetings rather than formal submissions this year, before full submissions are brought back for the long-term plan next year.

But he said the council had engaged with the public well, and arrived at a figure under the 3% limit.

It was pleasing to keep faith with the community, and keep that promise, he said.

So they set an above inflation target and applaud themselves when they achieve it.

And the mayor has said that they could rise more next year.

ODT: Rates rise on the table: Cull

Rates rises are always on the table, it’s a matter of how big a rise. And they could get bigger.

Dunedin Mayor Dave Cull says he would consider a rates rise of more than 3% next year, if the community signals it supports more spending.

Mr Cull said in The Interview the city did need to keep rates affordable.

The council has had a self-imposed 3% maximum increase for the past few years.

Yeah, right. From the council website:

However, he said: “We are already easily the cheapest city in the country and in the lower quartile of councils all around the country for rates.”

And Dunedin is one of the most poorly performing cities business-wise.

If the city wanted to “stand still” and maintain services, that close to 3% rise would continue, as that was the inflationary pressure on the council.

“If you want extra we’re going to have to spend some more.”

Asked if he would accept a rate increase higher than 3%, Mr Cull said he would.

The community, however needed to consider the value of what it would get for the cost involved, in next year’s long-term plan.

So the aim seems to be to get public acceptance – or at lest the perception of public acceptance via lobby groups – of increasing rates.

While rejecting major developments for the city. The only big goals seem to be cycleways and spending, therefore higher rates for residents, because the city keeps losing businesses and therefore business rates.

If, as is quite likely, education delivery changes in an Internet world and the University loses out then the city will not just struggle to keep up, it will decline even further.

And this is the latest council news: Dunedin Mayor Dave Cull’s defamation lawsuit settled for $50k

A Dunedin councillor has settled for $50,000 after taking defamation action against Mayor Dave Cull.

Councillor Lee Vandervis confirmed he settled the case because of legal delays and spiralling costs, but it comes without an apology.

The case was sparked by a heated exchange in December 2015. The mayor ejected the outspoken councillor from a council meeting after Vandervis claimed he paid a backhander to secure a council contract in the 1980s.

Council’s insurers felt that making a payment of $50,000 to Vandervis to cover his costs to date would be much less expensive for them than a successful court outcome.

Dunedin has lost it’s fire while the mayor and councillors burn each other.

Penny Bright loses appeal

(Yes, she did have some voter appeal in the last local body elections, getting 4th with 11,723 votes)

I doubt that many will be surprised that Penny Bright has lost her appeal in her ongoing battle to avoid paying rates in Auckland.

NZ Herald: Activist Penny Bright loses latest battle with council over unpaid rates

Activist Penny Bright has lost her latest battle against Auckland Council over her unpaid rates.

Chief High Court judge Justice Geoffrey Venning dismissed an appeal by Bright on Monday in the High Court at Auckland.

Bright had appealed a decision, made by the Auckland District Court in February, which required her to pay her rates, which have been outstanding since 2007.

The summary judgment obtained was for outstanding rates and penalties of $34,182.56, as at 30 June 2015.

In the decision, Venning said: “Ms Bright, like other ratepayers, has an obligation to pay the rates that have been validly assessed as payable by her. Her refusal to do so simply increases the administration costs of the council.”

The court also awarded the council costs.

Cost may add up to a bit on top of her rates arrears and penalties.

It is also quite odd that someone who doesn’t pay their rates stands for election for the mayoralty.

Her campaign slogan is “stop corruption”at pennybright4mayor.org.nz

PennyBright4Mayor

If she misses out on the mayoralty she could always stand for the by-election on Phil Goff’s Mt Roskill electorate should he win – she could campaign there on not paying tax.

 

 

Mayor and councillors pleased with 3%

Yesterday I posted What to do with an unspent $1m? The Dunedin City Council spent it and were happy to keep a rates rise to their targeted limit of 3% (they achieved 2.97%).

ODT: Council keeps rates rise to 2.97%

Councillors were almost unanimously pleased with the outcome, Mayor Dave Cull saying it had arrived in a “very good place”.

“We have provided for almost all of what we went out and proposed to our community in the consultation.

“We have managed to keep faith with our promise to stick within a 3% rate increase,” Mr Cull said.

The problem with this is that rates continue to rise faster than inflation, this year about three times faster.

Last year DCC set a 3.8% rise, also well ahead of inflation. And it’s been worse than that, as this chart to 2013/14:

rates-infation-chart

Source:  https://www.dunedin.govt.nz/services/rates-information/rates-history

I think that rates outstripping inflation is a common problem around the country. It’s certainly an issue in Auckland.

If central government kept raising taxes significantly higher than inflation voters would rebel, so why do local body voters not seem to care?