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Manukau City Faces Major Challenges Over Rates

1 December 2004

Manukau City Faces Major Challenges Over Rates Levels

A councillors' workshop is to be held in February to examine the issue of rating levels for next year against a backdrop of growing demands on the Manukau City Council to provide costly new services and public facilities. The workshop will review the likely expenditure levels for the next financial year, financial restraints the Council is under and the impact on rates.

Manukau mayor Sir Barry Curtis says in recent years there has been a strong pressure to keep rate rises low - around or under the rate of inflation.

"The Council has succeeded in achieving that and last year's rate rise overall was 2%. In the recent election campaign many candidates publicly promised to support rates rises of no more than the inflation rate. But that may not be possible if the Council is to meet its many obligations and balance its responsibilities.

"Manukau is the fastest growing city in the country and we must provide the core services needed by new communities such as Botany south. Our population will continue to increase in large numbers and the new town of Flat Bush will have 45,000 people within ten years.

"In addition, community expectations about our role and what should be doing are continually rising. That all means we need higher revenue to pay for those services.

"Here is the choice the councillors face: if we are to keep rates rises low, which services will have to be cut back and which planned facilities should be delayed or not built? What should be our priorities - new roads or new libraries?

"It is clear that budget cuts made by councillors last year were a major factor in the staffing shortfalls in our building consents unit, and that led to a drop in service quality which is now being rectified. Sometimes the old saying "penny wise, pound foolish" is absolutely true."

Over the next ten years the Council expects to spend $1.25 billion on new basic infrastructure as a result of growth. Two thirds of this will be spent on roads and water-related infrastructure. The rest will go on community facilities such as libraries and swimming pools.

Sir Barry says this spending is not optional. "People expect good roads, well maintained parks, pools and arts centres, and quality water services. They will not accept second-rate facilities, shoddy planning or poorly built roads and bridges.

"The Council has committed itself to meeting expectations for public services and facilities right across the city. In particular we are not going to provide cut-rate facilities in the low income areas. It isn't just a matter of community pride - these buildings and services have to last a long time, so we are not going to cut corners. It's a quality of life issue.

"We also face rising obligations from new legislation. Increasingly, councils are expected by the government to provide more and more services and community consultation. There is no question that must accept these obligations but there are great administrative costs as a result. It is an issue of serious proportions and needs the involvement of central government to address it.

"We are looking at alternative ways of raising revenue such as developer contributions, which will be bringing in an estimated $15 million per year. But rates will continue to be the primary source of our income. There is not much fat to prune from our budgets and the workshop in February will be crucial in determining the way forward for the Council."

Every year most of the City Council's expenditure is on core services including building roads, wastewater and water supply facilities, planning, regulating and waste removal, and operating community facilities such as swimming pools and libraries.

For the current year, roading is the biggest single category of asset expenditure at $44 million, followed by parks, pools, wastewater, storm water, libraries and learning centres, properties, water, town centre development.

Rates are based on land value and just under two thirds of the projected total revenue income comes from residential rates. Currently there are 88,754 individual residential ratepayers out of a total of 96,500 ratepayers and they will pay $119.5 million in total in the current financial year.

ENDS

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