‘Financial Restraint Lies Buried In The Dust’ — Whopping Rate Rises Ahead For Kapiti, Warns Burns

A plan for increased spending and higher rates shows any financial restraint has been buried in the dust by the Kapiti District Council, says Guy Burns.

Burns, deputy chair of the Paraparaumu/Raumati Community Board, says: ‘It’s official, a draft KCDC Long Term Plan has been released and Council is considering raising rates by a whopping 7.8 percent next year — and 8.6 percent two years later.’

‘Whopping’ rises

‘It’s official, a draft KCDC Long Term Plan has been released and Council is considering raising rates to a whopping 7.8 percent—next year 8.3 and 8.6 percent two years later.

‘A big driver for the rates rise is a massive increase in capital expenditure—from $23 million a year for the last three years, to $73 million a year for the next three. Council state a major justification for this huge expenditure rise is ‘to stimulate the economic rebound locally…in response to COVID-19’.

‘The document uses the catch phrase ‘keep our spending up’ but a consequence of such a foolish policy change will be to ‘keep rates high’.

Council controlled trading organisation ?

‘To do this Council are musing with the idea of increasing their borrowing limit of 200 percent of operating income to 250 percent and creating a Council controlled trading organisation (CCO) to ‘operate commercially and can generate a profit for our district’. So called financial restraint lies buried in the dust.

‘The Mayor and Councillors who have approved this draft plan need to take a reality check. I have no confidence in Council using ratepayer’s money to set up an organisation to compete with existing businesses to make money for ratepayers. Leave business to business people, KCDC needs to stick to providing core public services for ratepayers.

‘It’s outlandish to increase our rates for the purpose of stimulating the local economy. We are a small borough of under 60,000 people. Let central government stimulate our economy. Council’s borrowing limit should be kept to its current level—just because interest rates are low is no excuse to increase our debt levels by 25 percent, they are already one of the highest in NZ.

‘Reduce operational costs’

‘In fact The Mayor/Councillors need to direct the chief executive to reduce KCDC operational costs by a figure of 5 to 10 percent. Savings can be found in this huge bureaucracy to bring down rates rises to well under 5 percent.

‘One positive thing I take from the draft plan is that Council are transparent about wanting to increase rates, debt and expenditure.

‘These plans are in draft form and will need to be approved by the Mayor and Councillors this Thursday 25 May. Consultation will then occur, but history shows us it’s hard to change the draft plan—probably it’s easier to turn an ocean liner around on a dollar coin.’

 

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