• Video: Historic proposed rates increase is a result of underinvestment in city's infrastructure, Napier Mayor admits

Video: Historic proposed rates increase is a result of underinvestment in city's infrastructure, Napier Mayor admits

The Mayor of Napier has admitted that years of underinvestment in the city’s infrastructure has resulted in ratepayers now being faced with a historic proposed rates increase

At a Council meeting yesterday, the Napier City Council voted unanimously to put the proposed increase of 23.7 percent – the highest in the city’s history - out for consultation and invited the community to provide feedback. The move was proposed by Mayor Kirsten Wise and seconded by councillor Keith Price.

The historic proposed rates increase come as the Council’s external debt is expected to increase from the $10 million now to $500m by 2034.

In an interview with Hawke’s Bay App today, Wise that there has “definitely been an underinvestment in our infrastructure and that's across the board”.

She said that while the council had invested heavily in its water infrastructure, “looking at some of our council buildings, some of those other facilities, we definitely need to up our game there”.

“And this is a result ultimately of 20 years of keeping rates too low. We actually have some of the lowest rates in the country, if not the lowest. I know we are certainly in the bottom three or four councils in the country in terms of what we currently rate our property owners.”

“I know that doesn't make it any easier for our community in terms of them looking at what's coming through in the future, but for us as a council, it's just not sustainable for us to maintain those low rates. We cannot do our job properly, unless we have adequate funds to do that.”

Asked if she had had any reaction since the Council made the decision to propose a 23.7 percent rates increase, Wise said she had.

“I've already had some pretty strong reactions, as you can imagine. And interestingly, there is a bit of a spectrum. So yes, some very strong anti, negative reactions and people are concerned about them being able to afford to pay. So I totally understand that.”

“I have also had some people approach me, however, and say, ‘We understand,’ and, ‘You're doing the right thing, because ultimately you have a responsibility to look after the city and the services you deliver and the facilities you own, and we understand why you are putting forward this proposed rates increase’." 

Wise said she was looking forward to receiving formal feedback via the consultation process which opens on 25 March. She has also promised that the Council will be open to implementing any legitimate ideas for cost cutting that are proposed by ratepayers.

“We want to hear your ideas, and if it comes through in a formal submission, then obviously that's something that we can then consider, work on, consult on if it reaches a point where we think it's a viable option and then incorporate it in our next annual plan next year.”

Asked if the Council had too many staff and if salaries were too high, the Mayor said the Council had been paying “quite low salaries” comparative to other councils around the country.

“If we want to attract quality staff, then we need to be paying market rates. And so we've actually been trying to improve our remuneration packages over recent years, so I really wouldn't want to take a step backwards in that regards.”

“In terms of the number of staff we have, we are quite unique here in Napier because we have a very, very wide variety of facilities that we own and operate, that a lot of councils around the country don't have. So we have an aquarium, we have other tourism types of facilities. We have our own city services depot, so we do all of our own water maintenance, gardening, public toilet cleaning. There's not many councils throughout the country that do that anymore.”

Wise says that she acknowledges that the proposed increase will come as a shock to the community.

“It's been a very long, challenging process to arrive at the 23.7 proposed increase. The first draft of the plan that was pulled together by council offices actually came to 43%. So there has been a significant amount of work done to reduce it down to the level that we are now at, and there's a number of contributing factors that make up that 23.7%.”

“I'm sure everyone would understand that we've got ongoing financial challenges around the cyclone recovery, which we're still having to address. And we're also proposing a new 2% rate to build a resilience fund, which will be utilised to prepare internally, both from a resourcing perspective and an infrastructure perspective for future events. So that's 2% of the proposed increase.”

She says that apart from the resilience fund, the Council is not doing anything else new.

“So, the rest of that rates increase is just for us to be able to continue doing what we are already doing.”

Watch the accompanying video to see the full interview with Kirsten Wise.