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Rate hikes defended as Kapiti Coast mayor says to region

Kapiti's mayor has defended a proposed rate increase that tops the Wellington region, by accusing other councils of "eating" their own future.

Other mayors, however, say they're quite happy with their lower percentage increases.

As of this week, all nine councils in the region have begun consultation on proposed rate increases for the next billing year, starting in July.

Wellington City Council is running mid-pack, with a proposed average 3.3 per cent increase. Lower Hutt is at the bottom with 2.3 per cent, and Kapiti Coast District Council is at the top, with 5.9 per cent.

Kapiti's council says it has to pass on the cost of unexpectedly valuable pipes to its ratepayers.

A revaluation of the council's underground assets revealed they were worth much more than expected, which has increased the cost of wear and tear, known as depreciation, which along with inflation accounts for most of the rates rise.

Kapiti Mayor K Gurunathan said one of the ways other councils kept rates increases low was by not paying fully for wear and tear.

"They're not paying for the future. They're just eating the future," he said.

But Kapiti's rates proposal, at 1 per cent above projections, has left ratepayers such as Ryan deCartier-McCarthy disappointed.

"If there were some new services on their way, I could maybe understand, but there is nothing new being offered to residents and a lot of this appears to be hush-hush and not being discussed in a open platform."

He bought his first home in Paraparaumu about two years ago and said, while he could cope with the proposed $111 increase he faced, taking his bill to $2100, there were tough times ahead for ratepayers with interest rises and revaluations looming.

Chief executive Pat Dougherty said councils were expected to fully cover depreciation, but some "are leaving a massive problem for future ratepayers".

Porirua Mayor Mike Tana, in his first term, said the council had previously underfunded depreciation but was now dealing with it.

His council's proposed 4.9 per cent was second in the region for city and district councils, but still below projections, despite now including depreciation and helping cover $3.2 million needed after slips and flooding.

Wellington Mayor Justin Lester said the city fully funded depreciation and had done "for years".

"Most councils don't, which means they're not fully funding the replacement of their infrastructure."

Lester was satisfied the proposed average increase struck a balance between delivering services, investing in the city, and ratepayer affordability.

Lower Hutt Mayor Ray Wallace said his council usually had the lowest increase in the region. It wanted to rejuvenate the city, including flood protection work, so would look to "put some more debt on", and was seeking to loosen its debt limit.

Wallace said the 2.3 per cent rise was a "good average", but residential property revaluations had seen whopping increases in values for homes.

Masterton Mayor Lyn Patterson said rate increases were often cyclical, depending on spending demands. Her council's proposed average increase was 2.4 per cent.

She was satisfied her council was paying for wear and tear, but councils could be caught out by sudden jumps in value after revaluation.

"That's what drives the depreciation costs, and therefore drives rates up to fund it."

Upper Hutt Mayor Wayne Guppy said keeping rate hikes under control was "about discipline". Depreciation was not an issue in his council, "as long as you don't compromise on your ... must-dos".

Carterton Mayor John Booth said his district's 3.6 per cent proposed increase could have been less, but money was needed for a wastewater plant development


Kapiti Coast, proposed average increase 5.9 per cent:
A median value residential property in the least expensive area would see a $125 increase to $2384. A median property in an expensive area would go up by $166 to $2914.

Wellington, 3.3 per cent:
The rates for an average residential property in Wellington would increase by about $77 to $2430.

Lower Hutt, 2.3 per cent
The rates for an average residential property would increase by $121 to $2319.

Masterton, 2.4 per cent
A median value residential property in Masterton would go up by $58 to $2292.


Kapiti Coast: 5.9 per cent, submissions close at 5pm, May 1.

Porirua: 4.9 per cent, May 1.

South Wairarapa: 3.75 per cent, 4pm, May 12.

Carterton: 3.6 per cent, 4pm, April 24.

Wellington: 3.3 per cent,5pm, May 19.

Upper Hutt: 2.83 per cent, 5pm, April 28.

Masterton: 2.4 per cent, 5pm, May 8.

Lower Hutt: 2.3 per cent, 5pm, April 28.

Greater Wellington Regional Council: 5.6 per cent, consultation now closed.
Real Estate Investar Editor
Real Estate Investar Editor
Real Estate Investar provides intelligent software, tools and data to help you save time and make money in the residential property investment market.

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