Homeowners hit in broken pledge

Invercargill City Council executives were scrambling yesterday to try to explain away their broken promise that homeowners would not have to pay more when the council reduced the rates on city businesses this financial year.

Council chief executive Richard King initially said he could not remember reassuring a public meeting in April that homeowners would not be penalised when the business rate was reduced because as a "tit for tat" the $1.9 million council contribution to running Venture Southland - till then a charge against the general rate - would become an extra charge against the business ratepayer.

When a transcript of his comments to the meeting was read back to him yesterday, he said he had been totally mistaken and indicated he had not meant to say that. Perhaps, he said, he had been confusing Venture with Vibrant Invercargill.

And council financial director Dean Johnston, whose comments at the public meeting supported Mr King's assurance that development charges (which include the central business district redesign and the cost of Venture) would be levied against businesses because they would be the main beneficiaries, said yesterday he couldn't remember those comments being made.

The general message from city hall yesterday was that some sort of mistake had been made at the public meeting but that there had never been any intention of making businesses pay the full cost of Venture.

However, Mr King's initial response to The Southland Times yesterday, that he couldn't remember giving those public assurances in April, seems strange. Only a week ago he had those exact comments quoted back at him by the freelance reporter who broke the story in yesterday's Southland Times, Nicola Fallow. She asked him in an email to explain why, after the promise given to the public meeting, the $1.9m cost of Venture was not being included in the business rate but was charged to homeowners.

Mr King didn't deny he had given that assurance when responding to the email, he simply ignored the quotes and the question, saying that "there has been no change to the way we rate to finance the activities of Venture Southland". Which was of course correct, nothing had been changed - but the change had been promised.

And in spite of denials yesterday, there is clear evidence in the council's draft long-term plan that at the stage the plan was presented for public consultation businesses were to be made to pay the main cost of activities such as Venture where they were likely to be the main beneficiaries in a trade-off for having the special extra general rate businesses had been paying reduced or completely removed.

Without, hopefully, causing too much information overload for readers those references include:

Page 14, Key Issues, proposes funding Destinational Marketing and Enterprise through targeted rates.

Pages 226, 229 and 232 show the enterprise activities are delivered by Venture and shows the cost as $1906,541.

Page 284 explains the economic development rate is targeted at commercial and industrial ratepayers only.

Page 289, under total rates to be collected, shows the total economic development rate to be collected in 2012/2013 as $1906,541.

So, it seems clear that in spite of the responses of both Mr King and Mr Johnston yesterday there was a clear intention in the draft plan presented for homeowner scrutiny to make businesses pay for Venture's activities as a "tit for tat" for cutting the higher general rate businesses have been paying.

In the end the businesses have ended up paying lower rates and the homeowners, the general ratepayers, are still being landed with most of the almost $2m cost of supporting Venture.

How is that fair?

The Southland Times