A key rates risk at our council

The next three years are critical for ratepayers in the Western Bay. The impending separation of the water supply, wastewater and urban stormwater functions into a new, ring-fenced entity will change how you are charged.

There are key risks of overspending if we vote unreformed big spenders into power, as they think it is OK that rates continue to increases faster than inflation.

The attached video was made by me at the last election, three years ago. Some things have changed. The change in government means we now have Local Waters Done Well, rather than the old Three Waters. As well, my toddler (who I borrowed the blocks from to make this video) is four years old, rather than one.

But the essential message of this video is still extremely valid so, rather than remake it, I’ve taken the frugal approach of reissuing the old one. The key point in this video is that there will be an enormous temptation for council to increase the cost burden on you, once your waters bill is separated out.

When I made this, I was not on council. Now I am, and it is clear the risks are even greater. Our head office costs have blown out and rates are already much higher than they should be. We have slipped down the ranking for high rates nationally but that is because other councils have accelerated their spending even more than us!

Council’s debt is rising fast. This new debt is funding essential waters assets (such as a wastewater plant in Te Puke and an impending new wastewater disposal system for Katikati). This is the nature of waters assets. Their capital costs are huge, and these need to be spread over the 40-50 years of life in the assets (or your waters bills will go up even faster).

Interestingly, the rest of council’s net debt is essentially nil as cash assets balance out the debt on relatively cheaper long-term assets such as libraries.

That is a good thing, but it raises a very significant risk that the council leadership sees this as an opportunity to go on a spending spree, raise more debt and sink money into lots of new pet projects.

There is already a belief that council will not be able to strip out all the head office costs once the waters assets leave, meaning rates will not fall as far as they should. I reject that view and am committed to getting council overheads down as far as possible.

But if our council decides to go on a spending spree as well, then your total bill of regional council rates, district council rates and water charges (which used to be combined in one bill) will mushroom to even more unaffordable levels. The risks to your bank account are serious.