Councillor breaks ranks over rates, 'spend-up'

ANDREA O'NEIL
Last updated 05:00 23/06/2014

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Lower Hutt is amassing a multimillion-dollar "war chest" by vastly overtaxing residents, and is embarking on a spending spree ahead of proposed amalgamation, a councillor has claimed.

Chris Milne cast the sole vote against Hutt City Council's rates increases, which he said were far higher than residents realised.

The average rates rise was promoted by the council as 2.6 per cent, but for domestic ratepayers the average was 6.3 per cent, and in areas such as Alicetown, where property values had increased, residents could expect double-digit rises, Milne said.

"Residents don't actually know about it yet. They'll know about it when they get their first rates bill."

A range of projects were boosted or brought forward this year, such as a $12m Fraser Park Sportsville development, a $6m revamp of Huia Pool and a $6m heritage restoration of the earthquake-prone town hall.

The council feared projects would be harder to accomplish if the city was competing regionally for funding, so was fast-tracking its wish-list, Milne said.

"We're having a big spend-up. We're doing a whole lot of projects that have been in the pipeline for a long time. With the threat of amalgamation, it's like, ‘Jeepers, we'd better get on with stuff'," Milne said.

"They've shoved just about everything they can think of into the budget this year. It's going way too far."

Mayor Ray Wallace could not be contacted yesterday. Finance and audit committee chairman Max Shierlaw said Milne had voted in favour of many projects in the Annual Plan.

"He voted for most of it, but he didn't want to pay for it. His solution is to rack up debt instead, which is just deferring rates increases," Shierlaw said.

The city's assets were due for upgrades, and money needed to be put aside for infrastructure replacement.

Residents had welcomed projects in the Annual Plan, which gave the council its mandate, Shierlaw said.

But Milne said that to pay for the programme, councillors passed an extra 1 per cent rates rise for three years running, which added up to $70m over 20 years. At least $15.3m of the cash was not assigned to any project.

"The numbers are undeniable. We're being overtaxed. It's an enormous transfer of wealth from ratepayers to the council."

The council's debt ratio would plunge over two decades, creating a "war chest" of cash, which would spur future councils to spend up large, he said.

"With unnecessarily higher rates powering much lower debt, in the future the temptation to spend even more will be irresistible to politicians."

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The council will sign-off its rates on Thursday.

- The Dominion Post

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