Guest Post: WCC fiddling while Wellington burns
A guest post by Nicola Young:
Nero is alleged to have fiddled while Rome burned – a bit like Wellington City Council, which is ploughing ahead with its biggest-ever programme of projects despite rising costs, rising debt, and lack of manpower. Rather different to the Government’s approach, which has acknowledged capacity constraints and scrapped or re-prioritised some major projects.
At the recent Annual Plan debate, Council’s six staunch independents (Cllrs Apanowicz, Brown, Calvert, Chung, Randle and me), plus Cllr Free, urged a tough rethink of projects. We argued Council’s focus should be on core services and resilience, and wanted a balance between ensuring critical projects are delivered while Wellington remains affordable. Most Councillors didn’t heed Wellington economist Brad Olsen’s advice: ‘We don’t have the resources or people to fix everything overnight, so we need to make a plan for the future: to maintain, replace, upgrade and bolster our infrastructure. That means deliberately putting some critical needs front and centre and being bold enough to say, ‘not now’ to other investments.’ – Brad Olsen, Stuff, Feb 26, 2023
Predictably every one of our suggestions was rejected by the Labour-Green bloc, which doubled down, adding even more projects to the spending, and followed WCC officers’ recommendation to ‘cut costs’ by postponing debt repayments.
This just makes our dire situation worse: Council’s current debt of $1.24billion will increase to $1.55billion next year. We’ll be paying $41.4million in interest this year (the final cost of the St James Theatre upgrade); next year’s debt repayment is an eye-popping $61million – almost what we’re paying for the recently completed Omāroro reservoir in Mount Cook. None of these figures include $400million for the Sludge Minimisation Project – essential infrastructure we must prioritise.
Remember last year’s local body election when candidates pledged to ‘fix the pipes’? Yet when Wellington Water asked for an additional $10 million to repair pipe leaks, Council voted to fund only $3.3million. In real terms that’s a decrease in operational funding due to rapidly escalating costs across all sectors; for example, our roading contractor Fulton Hogan has warned its estimated costs for its WCC contract will rise by 55% over the next 12 months. So we’re delaying tackling our poor infrastructure – just like the debt repayments.
Let’s Get Wellington Moving (LGWM) is another problem – at an alarming estimate of $7.4billion. Its consultants’ fees are expected to hit $60million this year; in addition to the $73.5million already spent. The proposals include light rail from the railway station to Island Bay – which doesn’t go to the airport! The Golden Mile ‘revamp’ will include the removal of about 300 car parks, at a time when retailers and hospo operators are already struggling – there are now 17 empty shops in the Courtenay Place area.
The independents put forward a number of recommendations that balanced resilience and prudence: prioritising water infrastructure, continuing support for the arts and culture sector – a pillar for Wellington that’s been our competitive advantage for several decades – and financial resilience (rather than increasing debt).
We were outvoted. The proposed average residential rates increase of 12.3% starts in July, and there’s no glimmer of light next year – when funding for the much-needed sludge treatment plant starts, adding a 2-3% levy to the rates.You can give feedback on Council’s Nero-style financial planning by submitting on the Annual Plan, which will be finalised at the end of May. Tell the Mayor and councillors what you consider important – and the ‘nice-to-haves’ that can wait. There’s more information on Council’s website. Google ‘WCC Annual Plan 2023/24’ or go to https://www.letstalk.wellington.govt.nz/annual-plan-2023-24.