Rates

Andy Foster — Vote #1 for Council

ONSLOW-WESTERN

Economy and Rates

It’s important that you are confident that you are getting value for your rates money. That means Council choosing the ‘right’ things to spend your money on (ie focus on priorities), and ensuring that things Council and its contractors do are done efficiently. We’ll all see things we think could have been done more efficiently or things perhaps we don’t agree should have been done at all.

We all know that rates have been rising in recent years, and this is predicted to continue. Councils are no more immune from building, material, labour and energy costs for example than are you or I as householders or business owners.

Infrastructure – It has been instructive to read the recent Shand report on rates. It confirms what we already knew, that many local authorities have very large deferred infrastructural maintenance costs. Wellington City has led the way in asset management planning and our infrastructure is in sound shape and necessary improvements are well planned and budgeted for. There are some opportunities identified in the Shand report. Most particularly if Government agreed to something we’d been asking for years, that is that the Government pays rates like the rest of us. That would make a significant reduction in all our rates – if Government agrees to it.

Focus on Priorities

A major driver of increased costs for Wellington City is our investment in new projects and programmes. People sometimes say that the rates are going up but there are no more services. That simply is not true. Most years our Annual Plan includes up to 20 ‘new initiatives’, that is new programmes. Almost without exception they are being pushed for by some members of our community, and sometimes by large sections of the community. However it is very rare that Council chooses to reduce a service, or even drop one. The inevitable result is rates rises.

Let me be clear. I think the majority of Council services give really good value for us all as residents and business people. However there are projects at the margin.

So what should we do ?

Our consultation processes should ask you not merely to tell us what projects you like but to prioritise between a range of discretionary projects. Obviously Council has to provide information about the costs, the rationale etc, but getting feedback on what people value most would greatly assist in decision making. I hope it would also focus more councillors on priorities too.

We can defer spending to spread costs. This is most evident in our capital expenditure programme. It is running at almost $140 million this year, $180 million next year (2008/9) mainly driven by the indoor sports stadium, before dropping back to an average around $120 million. The problem is that we know that future Councils will also have new spending ideas, both operating and capital, so the anticipated reductions in out years may unfortunately be somewhat overstated ! One example of a saving which I promoted 3 or 4 years ago was deferring Stage 4 of the Southern Landfill until it was needed, pushing back a capital cost of $20 million by 3 years, and saving over $4 million.

We can scrutinise costs more closely. When first elected I earned a reputation among my colleagues and officers for going carefully, line by line through spending proposals. I had some wins, some losses when proposing savings. Council as a whole through the 1990s was very focussed on keeping costs down, and internal costs of Council were reduced by upwards of $20 million per annum. However in more recent years it has been patently obvious that there has been less focus on keeping rates down and no appetite among the vast majority of councillors for the effort that kind of scrutiny would require. I think that needs to change. I’ll use the indoor stadium again as an example. Councillors simply accepted officers’ estimate of cost of $40 million (now $46 million) for construction of the indoor stadium despite me pointing out it included millions of dollars for time escalations and contingencies. I am strongly of the opinion that from a governance point of view a project of such scale should have costs much more closely scrutinised, and a formal monitoring process as we did for the sewage treatment scheme 10 years ago.

I think there are also areas where councillors could exercise greater scrutiny including over Council debtors, and monitoring of expenditure in delegated areas such as the event fund.

In every decision we make I think councillors should look at the dollar implications, and test them if need be. I feel there is too often an attitude of just glossing over the $$ and an unwillingness to test the dollars.

So where are some areas I think are on the margins or savings ?

Some examples of capital project savings in the last three years.

· $1 million off the Events Centre redevelopment.

· This week (18 Sept) I persuaded my colleagues to review the $1 million proposed for a new bridge off the existing City to Sea bridge from Civic Square to the waterfront. Why three bridges within 100 metres of each other ? The new one wouldn’t even improve disabled access. To me a retrofit of the steps off the existing bridge would be much cheaper and give a better outcome.

· I persuaded colleagues to dump plans to demolish 4 perfectly good existing housing units in Strathmore, and create 6 new ones, at a cost of $600,000 per unit. It just didn’t make sense when you could buy better houses for less, new. I’d rather sell existing housing stock and buy new.

Thinking forward here are just some of the marginal areas I think we should save money.

· Indoor Sports Stadium – we could get a better result for less money

· Creative Wellington – we are spending approximately $1.3 million per annum on marketing ‘creative Wellington’ in what seems to me a fairly incoherent fashion, with little indication of any measurable outcomes. (Please note this has nothing to do with our highly effective tourism marketing done through Positively Wellington Tourism)

· Sister Cities – some of our sister city relationships have a good economic foundation, but most have never got past cultural exchanges. I think the latter ones represent a poor spend.

· The Zoo. I’m unconvinced that spending $16 million on the capital development programme of the zoo over the next 10 years is justified. Add in the annual operating subsidy and it will run to over $4 million per annum, or over $30 per visitor. I’d like to see over time a narrower focus on breeding programmes for threatened and endangered species.

· Managing the waterfront

· Proposed Spinks Cottage youth café in Willis St. Council quite rightly supported the proposal. However the café proponents were declined resource consent to move the heritage building. They have appealed the decision made by Council appointed independent commissioners. It doesn’t make any sense to me to have Council supporting an application to the Environment Court, and defending the same decision. That’s a fair chunk of ratepayers money, probably for nothing. My colleagues however did not support my recommendation to say we should work with the café proponents on another site.

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