How much can Invercargill ratepayers realistically afford?
"There is no way I can be party to bumping up (rates) $1000 in one go.”
Pressure will again come on Invercargill’s elected members as they look at what hit ratepayers might be in store for in the 2024-2025 annual plan.
Invercargill Mayor Nobby Clark says staff, at a recent workshop, revealed a forecasted 35% rate rise next year if it was to factor in everything it wanted to sort.
“It would mean the average rate would go up close to $1000 a year. There is no way I can be party to bumping it up $1000 in one go,” Clark said.
Clark said there have been calculations done to whittle it down to a 9% increase, but he is still not comfortable with that projected increase and is keen to see it reduced further.
“Last year we were told it was going to be 20% and we got it down to 5%. It eventually went to [5.65%] because the minimum wage came in that we weren’t aware of.”
“It is very easy for council staff to say; ‘I need this or I need this’, with all the projects, they are nice to have but you have got to be able to afford them,” Clark said.
The museum project looms as a priority and it appears something will happen with Wachner Place and that cost would also need to be factored in.
Clark views that as a pressing issue given it ties in with the former Menzies Building which is now being developed into a 150-room Distinction Hotel.
Other potential projects may well be viewed as too much at this time for the council.
“My walking track around the city? I’m not sure about that at this stage.”
Clark has pushed to develop a “lighting and sculpture” trail that would link the Ōtepuni Gardens and other areas of Invercargill’s central city.
Clark included the trail idea as part of his election campaign last year.
He stated the following leading up to October’s election: “I would develop a loop walking trail from Kmart, up the Otepuni Stream with night lighting, along Queens Drive past the umbrella and other artwork, past the Water Tower (also lit at night), down Gala St and into Queens Park (trees lit up like Matariki for 2 hours after dusk every night), then back through the inner city with historic buildings displayed at night with up lighting and back into the inner city where we will have two new hotels (ILT Langlands and Destination Hotel in 2023).”
In May it was recommended that the council allocate $100,000 in the 2024/2025 budget for scoping work for the trail.
That scoping work would outline the options and costings for what the project could look like. Council staff indicated a trail of five sculptures is likely to cost at least $500,000, an estimate based on the work done as part of the umbrella relocation.
Clark was looking at all potential levers that could be pulled to help keep rates down.
“Rugby Park, the Water Tower? We would like to do all of those things. I’ve tried to sell some reserve land, [but] it might be that the money from reserve land has to stay in the reserve pie.”
He is getting advice on whether any money from the sale of reserve land could be used to help offset rates.
Clark noted a 9% rate rise would be a “the lower to midrange” figure in comparison to councils throughout New Zealand.
But he was concerned about the ongoing impact of rate rises at that sort of level.
“9% over ten years is not 90%. If you compound it, it’s a way more than that.”
“I don’t know whether [9%] is sustainable, to be honest. [Superannuation] is not going to go up that much, it’s a hidden cost that is coming for a lot of people on lower incomes and in the elderly area as well.”
“It could be that my rates, ten years from now, is six or seven thousand. It beggars belief.
“We’ve got to find better revenue…. But on the other side can we cut what we deliver to the community?
“Do we need to have the swimming pool open seven days a week, could it be six? Could the library be six days a week? Could reception be 9 to 3 or 9 to 4 instead of 8 to 5?
“All of those things people don’t like talking about, it’s horrible. But what’s the alternative? The alternative is eye-watering rates.”
To get rates down from a forecasted 20% to 5.6% for the 2022-2023 financial year the council did reduce some services.
As an example, the council reduced the frequency of lawn mowing at reserves to make cost savings.
Council Chief Executive Michael Day released a statement on the process of working through rates.
“As part of the Annual and Long-Term Planning processes, council staff provide recommendations and options to Council on how to meet the community’s needs and requirements and to ensure we can effectively deliver our core infrastructure and services.
“While planning is underway, we haven’t yet struck a position on a rates increase for the 2024/2025 year, as is the case in any planning cycle at this time, hence why this discussion was held with Councillors in a public-excluded workshop this week.
“We are yet to work through the financial, infrastructure and level of service challenges and issues Council faces to get to a true position for the public, and we still need to work through rates affordability to achieve an appropriate balance before we bring this information into the public with options for our ratepayers and community to consider.”
For a mayor elected on the promise of bringing spending under control it seems fiscal responsibility has gone out the window in his haste to create a legacy. Looking more and more likely that the legacy will be crippling debt to pay for the dream list and the need to sell off the cities assets to fund the interest on the many loans.
But the mayor is already talking of a 35% rate increase to soften up ratepayers and when the real increase comes out at 10% he will be telling us all, look how much I have saved the ratepayers.
Smoke and mirrors?
I don't regard opening up Wachner Place as essential to add to the rates. Also rate payers should be made aware of what the multi miillions pumped into Invercargill Central is costing them in the form of interest alone.