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A council elected on the ticket of austerity has admitted defeat and is set to sign off on a 6.8 per cent rates increase.
Last night New Plymouth district councillors said they would not borrow money to keep rates artificially low for 2015-16 and would not "rape and pillage" the council's Perpetual Investment Fund to top up the shortfall either.
They "hated" setting rates at 6.8 per cent, they said, but they had done everything they could to lower costs, including shaving $83 million off the 2012-2022 long term plan.
However, despite the initial spike in rates in 2015-16, the council had managed to keep the average rate increase for the next decade at 3.5 per cent, with some years having an increase below 2 per cent.
Councillor Craig McFarlane said the 6.8 per cent spike was a true reflection of the balance sheet for the next 12 months and it was time for the council to be honest with the community, and stop borrowing money to smooth rates.
"For the first time in many years we will be able to balance our books," he said.
"I hate the idea of 6.8 per cent, but it is the reality. Being honest about that is a bold and transparent move for this council.
"The public are not going to like it, but at least we are not just pushing the increase out to the future."
Many councillors criticised the management of the Perpetual Investment Fund and said too often previous councils had taken too much money from the fund to subsidise rates and now it was ailing and had to be restored.
This had led this council to the situation it was in now, they said.
Deputy mayor Heather Dodunski told the new councillors they should not be too hard on themselves because the council had managed to find $83m of savings and there was $20m more set for the next decade.
"We have made some damn fine decisions," she said.
Most new councillors had now realised that cutting rates was not as easy as it sounded during campaign season, she said.
However, not all councillors were prepared to "congratulate each other".
"I'm disappointed we have come to this point," councillor Gordon Brown said.
The Perpetual Investment Fund had been so poorly managed ratepayers of today and tomorrow had been severely disadvantaged, he said.
"All of this can be traced back to the pathetic performance of Taranaki Investment Management Limited directors."
Councillor Grant Coward said people he knew in the community were hurting and would not be able to shoulder the extra rates burden, even if it was only about $3 per home, per week. "I don't like this. For some people that extra $150 a year is significant."
The proposed 6.8 per cent rates rise will go out for consultation with the proposed long term plan.
A DECADE OF DOLLARS
Proposed rate increases:
2015-16: 6.82 per cent
2016-17: 4.14 per cent
2017-18: 3.53 per cent
2018-19: 3.38 per cent
2019-20: 2.71 per cent
2020-21: 2.96 per cent
2021-22: 1.64 per cent
2022-23: 1.61 per cent
2023-24: 4.05 per cent
2024-25: 4.10 per cent
Average: 3.50 per cent
- Taranaki Daily News
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