Last year the increase, after much debate, was 9.8%. This year councillors have been presented with two sets of figures, to date, which will be subject to review of costs.
(i) That the forecast rate increase in the long-term plan was 8.5%.
Due to increasing financial pressure from insurances, inflation and Three Waters, they said the figure should be closer to 10.5%.
(ii) After recent discussions regarding Three Waters compliance, the impacts were divided between Three Waters and the rest of service delivery, with the overall impact being 14.67%.
I personally, don’t accept either set of figures.
Treasury and the government have got the Consumer Price Index down to 2.3% with a forecast of 2%.
The Local Government Index (LGI) which factors in some costs that are unique to councils, is under 4%.
So, given that LGI, how can this council justify somewhere between 8.5% and 14.67% ?
As I have said many times, why do we not review our employee costs each year, instead of considering small operational impacts (like low mow of green spaces).
Deputy mayor Tom Campbell quite rightly analysed that over the last five years, employee costs have risen 44% (from $24 million to $34m), while inflation has only been 21%.
He said this was a difficult topic to approach, but it needed to be said.
Employee costs are predominantly staff costs, but they also include contractors, consultants (who have specialised knowledge) and external legal services (on a case-by-case basis).
I’ve been asking for five years to get a quarterly breakdown, in our financial reports, of these costs and little to nothing has been provided.
I am then faced with what seems to be unacceptable costs that pop up from time to time.
Some examples are the Bluff Wastewater consent process, that engaged four consultants to provide legal, planning and consenting advice beyond what could be delivered internally by staff.
That group of part-time advisers, to date have cost council $782,000.
At the end of that process, we did not accept the outcomes they recommended.
Another example is contractors being paid $300,000 per annum to provide services.
That is twice what I earn as mayor.
While these sort of costs may be justified, it seems we as elected members have lost control of our monitoring role.
So, again I’ve advised the chief executive and my colleagues that I will not support any rate increase higher than 3.9%.
I get daily feedback on the impacts on families of the cost of living and the pain around fuel, power, food and rates. A cauliflower in a local supermarket last week was $11.
Fuel, power and groceries are provided by what many consider to be uncompetitive companies and while the Commerce Commission regularly raises this with central government, little changes.
However, the worst monopoly is the council.
We have no competition for the services we provide and we have a self-determining level of rates income.
We also have other sources of income that will be reviewed such as user-pays fees for dog licences, entry to Splash Palace and costs of consenting.
But by far the largest source of income to offset rates is the sale of assets that provide little value.
The obvious example is Donovan Farm (a portion of Donovan Park reserve).
A few sheep graze the area, the A&P show uses it once a year and some equestrian riders also use it.
Yet, if we sold it, we would have $20m-$30m of additional income.
I’ve had that as my No1 priority, even ahead of the museum build, and yet two and a-half years on from the last election, the papers that need to go to the Minister of Conservation are still a work in progress.
So, if you support restricting the overall rate increase to 3.9%, you need to submit, submit, submit on the council’s Annual Plan.
It is easily done online.
But please don’t come up to me once I retire at the October elections and complain that rates are too high.
If you wish to be part of the silent majority who believe that council never listens, just remember this is election year, and elected members are aware of that.
— Nobby Clark, Invercargill Mayor
