Government driving council to raise rates or not?
 |
Straight from city council A personal view, by Councillor Steve Morris |
The Government has been facing pressure about housing and so has passed the buck onto that perennial “whipping boy” – local councils and their ratepayers.
This week we debated the Government's new requirements for council to not just zone more land residential but now provide enough water, roads, stormwater and sewage to developer's land before they build on it.
I say requirement because if we don't Government can sack your elected council and appoint commissioners like they did in Canterbury.
Before you get too excited at that prospect, let me explain what building this new infrastructure will cost your city. Today our debt is $275m with a debt to revenue ratio of 179 per cent. To comply with Government's new demands and keep running the city we could have to borrow up to $800m by 2021.
This would give us a dangerous debt to revenue ratio of more than 300 per cent. Our major lender has said it “will more than likely cease lending to council” if we pass 250 per cent and may “require all debt and outstanding interest to be repaid”.
One way council can keep its debt to revenue ratio below 250 per cent is to increase its income. How? By increasing your rates!
Government has said council can borrow off it to build the infrastructure, but it's still debt. Several of my colleagues have rightly said there is no way they will allow the city to get into $800m of debt – and I agree. Will Government change their loan offer to a grant to keep growth going? Or will they require ratepayers to pay more?
Posted on 06-04-2017 10:49 | By Anbob
How does $275m + $256.1m (no interest) equate to $800m? Is the rest of the debt TCCs wish list? Museums, new admin building etc. are not high on ratepayers wish lists. Traffic congestion, flooding, infrastructure are. Infrastructure brings more ratepayers into the income net. The TCC wish list just adds to the yearly cost of running the Council. Like an ordinary household budget, only spend on wants when you have saved the funds, invest in income producing assets any chance you get. I Would like to see Councillor, planner accountability of decisions made whilst in power. Not talking about you particularly as on the whole I think you do a reasonable job. I look forward to your reply.