Election 2019: Rotorua Lakes Council mayoral candidates on debt and rates

Rates. Even ratepayers who take a bare minimum interest in council affairs cannot help but pay attention when their rates bill arrives. The Rotorua Daily Post asked the city's mayoral candidates about their goals for rates if elected and how they would approach managing the council's debt, and found out what residents and businesses want from their rates.

Rates should be kept at a minimum, affordable and below inflation.

That's the view of some of Rotorua's mayoral candidates and what they are promising to strive for if elected.

The council's 10-year Long-Term Plan forecasts average residential rates increases in the next three years of 5.1 per cent, 3.03 per cent and 1.85 per cent.

They are increases set by the existing council led by incumbent mayor Steve Chadwick.

Chadwick said, if re-elected, she would strive to keep rates affordable within the council's long-term financial strategy.

"We must maintain our financial Fitch AA- rating, and keep the cost of borrowing affordable while preserving sufficient debt headroom for unplanned events like the flooding.

"Partnership investment from government and trusts has helped to keep rates as low as possible while continuing to invest in growth."

She said if re-elected she would maintain "the philosophy of partnerships".

When asked how she would approach managing the council's debt, which is currently $211 million, Chadwick said: "Rotorua sits at 30 out of 75 of all councils rating for the affordability of our rates. We remain below the average."

Dennis Curtis also hoped to hold the forecast rates levels by keeping forecast and actual spend below budget.

But he said he would "aggressively" manage the council's debt.

"The council must plan to reduce the time and with the time reduces volume and value."

Curtis called for a return on investment from council-controlled organisations which would alleviate costs in other areas.

Mayoral candidate Rob Kent said he wanted to keep rates "at the minimum possible" by "taking proper financial control".

"The council must become more efficient and cost-effective, which it certainly isn't at present."
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Kent believed one way of achieving this was with a new council committee structure. The existing structure sees committees make recommendations to the council, which has the final decision.

"My solution is to have the Te Arawa, Lakes and Rural Boards sit on all main committees and at the council table, but not have voting rights."

Kent also saw the committee structure as a way to manage debt.

If elected, he wanted a Performance Committee, Finance Committee, RMA Policy Committee and the council to deal with policy and strategy.

"The Finance Committee will look far more closely into budgets and actual performance of all facets of the council and the CCOs [council controlled organisations], and set the guidelines and parameters for the council to follow."

Reynold Macpherson said rates had become unaffordable and caused people to leave the district.

He said the existing council had "failed to compress its costs, manage projects on time and under budget, diversify its income and eliminate waste".

"We can't afford this council."

When it came to managing debt Macpherson called for a forensic audit of the council's financial situation and management to give the incoming council what it needed to develop a debt management strategy.

"Vanity, legacy and payback projects will be eliminated. Portfolios will be scrapped to prevent profligacy. Authorised programmes and projects will be monitored by subcommittees of council led by councillors to prevent budget blowouts."

Bryce Heard: Residents want efficient spend

Rotorua Chamber of Commerce chief executive Bryce Heard said businesses and residents wanted value for money and prudent management from their rates.

He said there was no reason rates could not be kept in line with inflation.

"It should be achievable, I don't see why it wouldn't be and I think we have to achieve it because when you think about people on benefits, they are not in a position to pay higher rates every year."

Heard said the council needed to make sure it had "good debt" and was borrowing for the right reasons.

"Bad debt is borrowing to pay your way and I don't think the council has got that. They are borrowing to grow the economy ... That's the right reason to borrow provided the projects are going to generate economic growth.

"I can't say whether they are or not."

Heard said the business community wants to see business growth and prudent management of council affairs.

"The question is are we getting that prudent management? On the face of it, we are but we can always do it better," Heard said.

"[Residents] want to know the money is being spent efficiently, not being wasted on excessive admin and see council delivering aggressively on its promises."