The Whangarei District Council debt problem

Whangarei * ratepayers * Vince * water rates

Every year, we property owners give the council around $2000 in rates, yet Council still has a whopping nine figure of debt – that’s $160 million. Divide that by the 80,000 population of Whangarei, and each of us appears $2000 in the red.

How does a Council create that much debt, and why is it on our heads?  Councillors are not perfect and at times they misinterpret the needs and wants of the people; as an example we needed a new sewerage treatment plant, however we wanted the City to look beautiful all year round.

These needs and wants are not just over the past few years. The problems have been accentuated by several Council elections, where people do not understand the responsibilities of the board (in fact, if the rate payers could not or would not pay, then our Council would be broke.)It doesn’t help that the Council then sees money in its own accounts and borrows off them.  Take, for example, the money collected for the water rates, which has many times been used to fund projects around the district.

Council should put up the rates, I hear you say – after all, we take in lower rates here than Auckland or Tauranga.  Our district’s median wage for a single person is $24,000, however, and based on Statistics NZ figures, adding a wife and two kids to the mix with school fees leaves a person with under $10,000. The money must coverentertainment, rates, clothes and any other unknown bills that spring up in the rest of the year.

So what strategies exist to tackle debt? WDC must either not spend, put rates up – or find another alternative.

The third way is something I’ll talk about in my next blog post.

Thanks, Vince.