The proposed rates increase, discussed this week by the Strategy and Policy Committee (the Mayor and all Councillors) as part of the Draft Annual Plan process, has been kept as low as possible in the face of significant budget pressures including Wellington's leaky homes liability, significant inflation of costs of materials including oil-based materials and fuel, interest and depreciation costs on Council assets and the potential economic impact of the Canterbury earthquake, including the possibility of a double-dip recession.
While the proposed average rates rise is held to 4.3 percent, the residential rates increase on an average Wellington home is likely to be about 6.5 per cent and for commercial property owners about 1.8 percent.
Mayor Celia Wade-Brown says difficult economic times mean the proposed Annual Plan has to be a balance between affordability for ratepayers, good decisions about the city's future and maintaining the wide range of essential services the Council provides every day.
"This is not the year for grand new initiatives."
Despite introducing austerity measures - a mix of savings and modest fee and charge increases - the Council proposes to invest $152 million in capital projects that include:
- $45 million on community housing, upgrades and new houses
- $36 million on roads, footpaths and cycleways
- $22 million on critical infrastructure for the city's water, stormwater and wastewater network, which includes the building of new quake-resistant reservoirs at Messines Road in Karori and Prince of Wales Park.
Old water pipes will continue to be replaced with quake-resistant materials under a programme began 15 years ago. The Council also aims to accelerate design work on quake-strengthening the 1950s Municipal Office Building in Civic Square, the adjoining Town Hall and other council-owned buildings.
A further $6 million will be invested in renewing and upgrading aquatic facilities.
The Draft Annual Plan process outlines the Council's work programme for 2011/12 and details what it will cost, along with any proposed rate and fee increases.
Recommendations agreed this week will be debated and finalised at a Council meeting on 24 March. The public will be invited to submit their views on the proposals from 11 April to 12 May.
The Council will adopt a final position on 29 June.
Mayor Wade-Brown says the reality is that some tough decisions must be made and rates will have to increase to cover the likes of the leaky homes liability and the cost of delivering services.
"But I am very keen to hear what the community has to say about what we have put forward.
"Given the tragedy in Christchurch I do believe it is important that we continue to invest in critical infrastructure such as the new quake-resistant reservoirs and push on with the upgrade of our network of water pipes with more resilient materials to ensure the city is better prepared to cope with and recover from a significant seismic event."
The committee has proposed that the Council takes the final step in honouring a commitment made 10 years ago to bring down the general rates differential - the difference in the rates share shouldered by commercial and residential ratepayers - from 7.1:1 to 2.8:1. The Council has been gradually closing the differential gap each year since 2000/01.
While the average rates increase at the start of this week's deliberations was expected to be 3.8 percent, Councillors decided against a $100,000 cut to grants for owners of heritage buildings - bringing it back to the 2009 level of $329,000 and, in a close 8-7 vote, also proposed a $650,000 feasibility study on the construction and design of a proposed new deepwater swimming pool complex at Kilbirnie.
Some of the proposed savings:
- $105,000 by reducing operating hours at the Central Library - rather than closing at 8.30pm on week days the library would close at 7.00pm, plus closing an information desk and providing international newspapers in digital format only.
- $500,000 by spreading over four years the grants fund to help local schools to upgrade existing swimming pools to improve access to learn to swim and aquatic sports
- $170,000 by reducing the size of Council-controlled company Wellington Waterfront Ltd
- $108,000 in sportsfield maintenance made possible by new artificial surfaces
- $100,000 by deferring some hazardous tree removals
- $100,000 by deferring the demolition of the old Patent Slip jetty in Evans Bay.
Because many services are heavily subsidised by rates, councillors have proposed a modest increase in some fees to avoid a higher rates rise. Proposed increases in fees and charges include:
- 18 percent increase in sportsfield user charges (excluding the Berhampore Golf Course)
- 5 percent increase in landfill fees and household rubbish bags
- 2.5 percent increase in swimming pool general admissions and learn-to-swim charges
- 6 percent rise in burial and cremation fees
- $1 an hour increase in parking rates and extending evening paid parking times on weekdays.
Although finding considerable savings, the Council in the next financial year proposes to spend more than $100 million on essential services for Wellingtonians:
- $54 million on managing and maintaining its water, stormwater and sewage networks
- $21.2 million on libraries
- $10 million on waste management and recycling
- $8.3 million on the city's galleries and museums
- $18.6 million on swimming pools
- $9.1 million on recreation centres
- $4.4 million on the Town Belt
- $3.5 million on sportsfields
- $2.9 million on community centres and halls
- $2.3 million on arts and cultural festivals.
The Mayor says community engagement is the key to keeping rates low.
"To keep rates low we will need to explore new and innovative ways of working together to ensure all of our communities continue to thrive and grow."