Rates-rise bogey dwindles to less-scary 70pc over decade

Auckland City ratepayers can breathe a little easier. Rates will not triple over the next decade, as predicted by council officials this week.

They may still double or just keep pace with inflation, but the most likely scenario is that rates will rise about 70 per cent, maybe a bit higher.

This was the signal emerging yesterday when councillors sat down to consider new works over the next decade - projects such as the new eastern highway, swimming pools for Otahuhu and Avondale, and speeding up repairs on the city's shoddy footpaths.

Being politicians, the councillors knocked on the head a suggestion by their officers that rates would rise up to 200 per cent to fund the full $3.7 billion of new works.

Even so, councillors have stuck their necks out by putting forward four funding packages that would lead to rates increases of between 67 and 99 per cent.

When the packages go out for public consultation in April, ratepayers will also be given the option of keeping rates at the level of inflation - or about 34 per cent over the next 10 years. This would mean the council could not spend another cent above the $2.4 billion of committed capital projects over the next 10 years, mostly on renewing existing assets.

It is impossible to imagine the City Vision/Labour-led council under Mayor Dick Hubbard and the opposition Citizens & Ratepayers Now bloc contemplating nailing down the hatches for 10 years. But there will be plenty of arguments about alternative funding sources and budget savings to fund the long list of not-so-costly and prohibitively expensive new works.

Council officers have come up with few savings within a total budget of $640 million and chief executive David Rankin said new funding sources were limited to a new charge on developments, road pricing and higher payments from council-owned businesses such as Metrowater.

To soften the blow of increased rates over the rest of this political term - particularly for the 2007 election year - some City Vision-Labour councillors, with backing from Mr Hubbard and C&R Now, have proposed using a $50 million payment from Metrowater to ease the rates increase in each of the next two years by 1.7 per cent.

Four City Vision/Labour councillors - Richard Northey, Neil Abel, Glenda Fryer and Leila Boyle - have objected to the idea.