Council 'not cost cutting, but slowing spending growth'

MATT RILKOFF
Last updated 05:00 31/05/2014

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Even when he feels the cold in his bones Owen Farquhar thinks twice about flicking the switch on his heater.

"You have to be careful with how long you use them," the 80-year-old pensioner says.

Careful because heat costs money and, as one of more than 145 elderly living in New Plymouth District Council's subsidised housing units, he doesn't have much.

He fears he will soon have less if the council follows through with a long talked about option of selling the 145 units.

"The rent would go up immediately, I would say. We wouldn't have the same comfort we have now."

Even now that comfort is sparse. His unit is small, cold and damp, but at least at $144 a week it's affordable and the council, he says, is a good landlord.

The council flats generate income of $912,000 but cost the council $1.1 million a year to run. It's a relatively trifling amount of money but it's enough to bring scrutiny from a council bent on reining in costs and rooting out inefficiencies.

After a decade of rates increasing at an annual average of seven per cent, the brakes are well and truly on. This year New Plymouth ratepayers face a two per cent rates increase. Pressure is already on for next year to be less.

"Tinkering has been done up till now and has got us to where we are," says Deputy Mayor Heather Dodunski. "But there has to be some hard decisions made in the next couple of years."

That means housing for the elderly, that service so often held up as a reflection of how much the community is committed to looking after its most vulnerable citizens, could be gone.

"It's not one of these things that, as far as ratepayers' contributions, is huge but its long-term maintenance is costly and so we have to look at opportunities.

"People are saying if it is owned by private companies conditions would change. But until we ask we don't know who might be interested. The people in them might be better off."

True as that might be, it will take a particularly strong-willed council to withstand the emotional public relations backlash that will almost certainly precede any change to provisions for senior citizens. Elderly, those aged 65 years or more, make up 16.8 per cent of the district's population. In 15 years this will be about 25 per cent, or close to 20,000 people.

It is this much anticipated demographic shift that is forcing a culture change in council spending in Invercargill, says former deputy mayor and long serving councillor Neil Boniface.

Not too dissimilar to the New Plymouth district, about 60 per cent of the city's population have an annual income of less than $23,000, Boniface says. At the same time they have a home ownership rate of 66 per cent.

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After a decade of seven per cent rates increases the city council last year slashed it down to 1.35 per cent. This year it looks like it might be just 0.5 per cent, sparking fears, like here, the city is at risk of going backwards.

They have achieved that in many of the same ways New Plymouth's council has achieved their two per cent. Line by line review of budgets, internal borrowing, and a continual review of how they deliver services. Their chief executive also has a seemingly unachievable three per cent efficiency clause in their performance review.

Whether or not such efficiencies can be achieved without effecting levels of service, or the "nice to haves" is largely a matter of perspective. New Plymouth's council's push-back on an earlier million dollar commitment to dredge clean Pukekura Park's lakes has sent park lovers into a spin. The axing of the $400,000 event underwrite fund was taken like a headbutt by the arts community. Property developers also face new costs, being asked to pay for their own recreational space which could add up to $4000 to the cost of a new home in some areas.

Complaints about how council spends won't abate any time soon, says Massey University School of People, Environment and Planning associate professor Grant Duncan, and demographics explains why.

The elderly are usually on fixed incomes and often living in high value homes which attract high rating values, he says.

"They often feel like the could be rated out of their homes. So they feel forced to protest against increasing spending because of the cost of their rates."

Duncan's Palmerston North colleague, associate professor Christine Cheyne, says it is right for the demographic trend to "shape and inform what council's do" but warns there are other trends, other ages, to be accounted for as well. In this she includes such things as immigration, increasing life expectancy, economic shocks, natural disasters.

"It seems to be that perhaps some councils think the aging trend means they have a falling income because the older age group are on fixed incomes. And certainly they tend to be very resistant to rates increases and they will be more numerous and they are more likely to vote and follow what councils do and councils will be responsive to them.

"But councils need to be equally responsive to other age cohorts," she says.

That will require innovation to achieve genuine consultation to

reach the ever growing number of people who don't participate in democracy through voting, or those who aren't even aware just how the council impacts on their life, she says.

To an extent the New Plymouth's district council has been trying to do this for a number of years. Former Mayor Harry Duynhoven held informal sit downs throughout the district, participated in internet discussions and had all meetings streamed live on the web.

Current Mayor Andrew Judd has promised to go into New Plymouth's pubs, clubs and marae in what have been dubbed "Community Conversations".

To Len Houwers, the new councillor who for two years now has been the face of the push for a cultural shift at the institution he was elected to in October, the changes at council are not being "framed" correctly in the media.

Councillors are not cost cutting, they are slowing down the rate of spending growth as demographics dictate they must, he says. Where some see senior citizens living under the "threat" of being turfed out of their council provided homes, he sees the opportunity for wider community benefit from the sale of the $12m asset. Where some may see a council threatening the vibrancy of a district, he sees a council striving to create a long-term sustainable community.

"I think if we look around we will actually notice that most of what passes as vibrancy is down to the efforts of dedicated enthusiasts and community minded individuals. The volunteers who run our clubs, sporting organisations, schools, neighbourhood events," he says.

Council has its place in the community, he says, but needs to be careful about what level of involvement enables community building and what level actually prevents it. "We've created a whole generation of people who feel entitled to benefits they receive from local government and don't mind or think about fellow citizens paying for their priorities. We don't build resilience and capacity by doing everything for people."

- Taranaki Daily News

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