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Home / Rotorua Daily Post

Ratepayers' report shines spotlight on Rotorua council spending

Kelly Makiha
By Kelly Makiha
Multimedia Journalist·Rotorua Daily Post·
22 Aug, 2017 09:00 PM4 mins to read

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Debt is a worry for Rotorua ratepayers and council, says Ratepayers Association chairwoman Glenys Searancke.

Debt is a worry for Rotorua ratepayers and council, says Ratepayers Association chairwoman Glenys Searancke.

Rotorua ratepayers pay more for their mayor, councillors and council chief executive than the average provincial and New Zealand council but our rates are on a par with other councils, a new report has highlighted.

However the Rotorua Lakes Council chief executive says the Taxpayers' Union Ratepayers' Report is "very misleading".

The report released yesterday shows the council's borrowing costs per ratepayer are quite a bit higher than other councils and so, too, is its advertising spending.

It shows Rotorua has 18,710 ratepayers. The average yearly residential rates locally are $2251, which is nearly $50 less per year than the average for provincial councils at $2300. The national average is $2251.

Rotorua mayor Steve Chadwick earns a salary package worth $131,223, which is up on the average for provincial councils at $114,940. Chief executive Geoff Williams' remuneration is $315,227, which is up on the provincial average of $302,606.

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Councillors earn an average remuneration of $49,850, which is more than the average provincial councillors' earnings of $36,109 and the national average of $36,534.

Council staff are also earning more than the average provincial council staff, with the cost per ratepayer locally being $1469 a year compared with $1218 for other provincial councils.

The council employs 368 staff, of which 43 (12 per cent of staff) earn more than $100,000. That is slightly more than the average for provincial councils (10 per cent) and the national average (9 per cent).

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Council borrowing costs per ratepayer is $445 a year, compared with $299 a year for average provincial councils and $264 for average national councils.

Read more:
• Street View: Do you get value for money from your rates?

But Mr Williams said the report was "based on some dubious assumptions".

"For example, they have calculated personnel (staff) costs per ratepayer by dividing the total cost of that (as per the 2016 Annual Report) by the number of urban residential ratepayers, so just one group of ratepayers rather than all ratepayers (residential, commercial, rural). There are approximately 25,000 ratepayers (and approximately 29,600 rateable properties) in total in the Rotorua district.

"We also believe our council has been placed in a grouping of 27 provincial councils with populations over 20,000 so we are being compared to mostly smaller councils, not just like-sized councils.

"In terms of debt, we agree it is higher than we would ideally like it to be. However, the debt we have today is largely inherited and driven by a doubling of debt between about 2007 and 2013."

Referring to staff salaries, he said a restructure in 2014 saw a reduction of positions, including managers, across the organisation.

"That required an overall lift in capability and skills to be recruited into the organisation and that comes at a higher price.

"My role as chief executive is both demanding and challenging but, despite this, I do see that I'm well recompensed for the work I undertake."

Former chief executive Peter Guerin's package, at the time he left, totalled $332,358.
When he took up his role in July 2013 Mr Williams received a salary of $294,270 (no car or superannuation). He turned down an increase in 2014 and an increase to $315,275 in 2015 (for 2015-16) was ratified unanimously by the full council on the recommendation of a chief executive performance sub-committee.

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Mayor Steve Chadwick said The Remuneration Authority set the salaries of mayors and elected members.

"Being mayor is a busy job and Rotorua being a tourism destination adds another load. It's not an easy job but you keep the big picture in mind and for us that's the 2030 vision and goals. Being mayor is a seven-days-a-week job and there are often early starts, with meetings, engagements and official duties throughout the day and into the evenings, as well as during weekends."

Rotorua District Residents and Ratepayers Association chairwoman Glenys Searancke, who is a former long-serving councillor, said she wasn't concerned about the salaries of the mayor, chief executive and councillors as they earned their money.

"They are in line with the rest of the country and I don't have a problem with that."

However, she pointed out an Auckland councillor earned on average $111,035 a year and Rotorua councillors earned on average $49,850.

"In Rotorua you are still working equally as hard."

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However, Mrs Searancke said she was extremely concerned about the borrowing and advertising costs.

"Our debt is top of the pops, or well up there really comparing it with the average and we have got some big projects coming up. The sewerage diversion scheme is going to cost millions and is a real worry for Rotorua.

"My message to the council is be aware of debt for the future."

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