Rising rates and debt a concern

JAMES IRELAND
Last updated 05:00 26/07/2013

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Nearly three years on from the formation of the super-city and rates are rising above the level of inflation and debt keeps growing.

During the next year the council has budgeted to borrow another $900 million, bringing total net borrowing to more than $6 billion.

By 2022 the council's debt is expected to reach $12.5b.

However the operating costs are expected to be less than total revenue in two year's time, creating a net income of $77m.

Council chief executive Doug McKay issued his first pre-election report last week, which outlines council's financial position and goals.

"The purpose of a pre-election report under the act is for councils to provide information to promote public discussion about the issues a council faces ahead of the local body elections, so voters can make more informed choices."

The council has set the debt limit at 275 per cent of the total revenue.

They currently sit slightly below 200 per cent and by the 2016/17 financial year that is expected to hit 212.5 per cent.

Despite keeping this year's rates to a 2.9 per cent overall increase the next three years are expected to bring rises of 3.5 per cent, 4.7 per cent and 4.9 per cent.

Over the next 10 years the council expects to spend $20b replacing and acquiring new assets including $9.4b on transport, $4b on water and wastewater, $2b on community and cultural facilities and $1b on stormwater.

Whau Local Board chairman Derek Battersby says he is comfortable with the debt levels as long as they don't spiral out of control.

"When we set up the super-city the Waitakere City Council was heavily criticised because of our debt levels. We had to fund things like the New Lynn developments. All that money went into infrastructure for things like water and wastewater."

Mr Battersby says when you invest you end up making a profit in the long run because building costs increase and the money can be collected later in development contributions.

"In a few years there's going to be 2000 more houses in the old clay pit area. The development contributions from that will be massive. But you have to spend the money first so they can be built."

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- Western Leader

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