4 Mar 2021

Wellington City Council proposes one-off rates increase of 13.5%

7:32 pm on 4 March 2021

Wellington City Council has finalised its budget for the next 10 years, proposing a rates increase next year of 13.53 percent, and an average increase of 5.77 percent over the next decade.

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Photo: 123rf

The marathon meeting lasted nearly the entire day.

The Long-Term Plan Committee meeting began with two hours of public submissions, followed by a number of amendments as councillors tried to force their own agendas through.

What was agreed upon will now go to the community for consultation, before it is then re-considered and adopted by council before 30 June.

Mayor Andy Foster has described the budget as the city's most ambitious as the council reckons with some of the most pressing issues its ever faced: historical under-investment in water infrastructure; a severe housing shortage with escalating rents and prices; numerous public buildings closed due to poor resilience; and an ever-present climate crisis.

To fund its operational costs, the council is proposing a rates increase next year of 13.53 percent, and an average rates increase of 5.77 percent over the next 10 years.

To pay for some of the capital expenditure, the borrowing limit would be scaled up from 175 percent to 225 percent.

The capital budget programme is set to exceed the previous Long Term Plan by $1.1 billion.

What is the money going towards?

Over the 10 years, this is where most of the money will be spent on:

  • $2.6 billion on three waters investment
  • $108 million on cycleways investment, including the Eastern Connections routes
  • $27 million will go towards a fully-funded Te Atakura implementation plan to help the city achieve its carbon emissions goals
  • $178.7 million on strengthening the Central Library
Barriers in front of Wellington Central Library.

The council voted to remove a proposal to partially privatise the central library Photo: RNZ / Samuel Rillstone

There are, however, other projects which the council still has no firm funding route for:

  • $163 million for sludge minimisation - Council is hoping to find an alternative funding source through the Infrastructure Funding and Financing Act, but if it is not possible, either the project won't proceed, or an alternative Public Private Partnership would need to be considered
  • $1.4 billion for Let's Get Wellington Moving: just $220 million of funding is included in the Long-Term Plan, but the final cost to the council could end up being six times that
  • $430 million investment in City Housing is needed, with the council hoping either government financial support, or the establishment of a Community Housing Provider, would get them there

A number of opportunities to raise money are being suggested, including divestment of the council's assets, including its 33 percent stake in Wellington Airport, as well as its portfolio of ground leases.

Last-minute changes during the meeting

Some councillors added in last-minute proposals to the budget.

That included the removal of a $75 million loan to the airport, the removal of which the airport has described as "mystifying".

Councillor Fleur Fitzsimons also won support for her amendment to remove the proposal to partially privatise the Central Library.

Wellington City Councillor Fleur Fitzsimons

Councillor Fleur Fitzsimons Photo: Supplied

The decision to look to sell off the office space above the library was made in a meeting a fortnight ago, seen as a way to cut costs, by splitting the $180 million needed to strengthen the building with a private company.

Librarians had said they were worried and angry that the suggestion to sell off the building had ever been proposed.

Dropping the proposal will however mean the council will exceed its debt-to-revenue ratio for the first two years of the plan. It will not be until 2023 that it is once again within the 225 percent limit.

During the meeting, the funding cuts to libraries' collections budget was also reinstated, after that had been agreed upon two weeks ago.

Other amendments to go through included councillor Rebecca Matthews' plan to have an extra $300,000 added into the Grants fund to enable non-council event organisers in Wellington to apply to be Living Wage events.

Predator Free Wellington will get their budget ramped up from $250,000 per year to $500,000.

Councillor Jill Day was also successful in getting an extra $2 million for the first year, and then $3 million for the next nine years, to be added to the Māori and Mana Whenua Partnerships budget.

She said it would help the council effectively deliver its three programmes: He waka eke Noa Effectiveness for Māori framework, Te Taurapa Strategy, and Te Tauihu Te Re Māori Policy.

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