Ten years of ?4.5 to 6 percent ?rate rises unacceptable
Gisborne District Council’s ?$5.1 million deficit for the year to the end of June is a shock to both the local authority and the wider community. It will also ignite heated debate on what the council can do in the immediate future.
Expenditure was $10m up on budget, and it is no surprise that roads have been blamed for the lion’s share of that — with $6.3m spent overbudget on emergency works and road maintenance this extremely wet winter. Only last week the regional transport committee was told roading maintenance spending had to rise.
The council’s initial response to the deficit is that the 2017/18 annual plan will go ahead but all non-essential works will cease.
It is also signalling that the financial situation and work programme ahead of it could lead to average rate rises of 4.5 to 6 percent in the 10-year plan — which would frankly be unacceptable.
The real crunch and the debate proper lies ahead when the council begins consultation early next year on its 2018-28 long-term plan.
It will seek the views of the community on what level of expenditure and services it wants before fixing the next long-term plan in June. These submissions are likely to be feisty to say the least.
The council faces some big commitments such as upgrading the city wastewater system and the Waipaoa River Flood Control Scheme, both of which are strongly supported.
The issue could be where it goes from there with developments like the Olympic Pool complex upgrade.
It is hard not to feel the council erred by restricting rate increases over the past four years to not more than an average 2 percent a year, a major plank of Mayor Meng Foon’s last two election campaigns.
In fairness, a lot has been achieved within that limit but something has to give now.
The council may well look to the Eastland Community Trust for help with things like the Waipaoa River scheme, which meets its regional economic development criteria.