Rates increase of 7.54% proposed
On 16 May, Council considered the draft budget for the year 1 July 2023 to 30 June 2024 and agreed on an overall rates increase of 7.54%.
Like the rest of New Zealand, Council is also facing a number of challenges with inflationary pressures, rising interest rates, supply issues and staff shortages.
The overall rates increase of 7.54%, which is 0.74% higher than the 6.8% forecast in the 2021-31 Long Term Plan (LTP), accounts for increases in asset replacement and management, compliance costs and rising employment costs. It will, however, enable the Council to push ahead with long awaited projects like the library extension and the denitrification plant in Glenavy, among others.
It will also help Council ensure that the infrastructure assets like water supply and roads, along with community facilities and parks are well maintained with timely renewals and upgrades to future-proof them.
Council continues to smooth the impact of the dividend income reduction from our Alpine Energy investment and increased costs of the waste management contract. Smoothing lessens the need for large increases in rates in any single year and is spread over multiple years.
The current cost of borrowing indicated an interest rate of 5.45%, a significant increase from the previous forecast of 3% in the LTP. Due to delayed borrowing drawdowns next year, the increase would amount to additional interest servicing costs of $41,000 compared to the current year budget.
Bearing all this in mind, Council have minimised the rates rise as much as possible by using reserves where applicable. Some Council fees and charges in relation to building consents, cemeteries, roading and new water connections will rise to ensure users pay fairly for the benefit they receive, which reduces the cost impact instead of falling on rates.
The 7.54% rates increase is an overall average, and individual properties will vary based on their targeted rates and services and movement in capital value from the 2022 property revaluations. The following table shows a selection of properties from the Waimate District and provides a guide of the value and percentage change to rates for those properties.
Mayor Craig Rowley says, “The proposed rates increase was a result of a detailed review of all budget items and is in line with the rate of inflation. We wanted to ensure we could continue to provide our core functions without cutting services, and our planned infrastructure upgrades can move ahead.”
The draft 2023/24 Annual Plan will be presented for adoption at the Council meeting on 20 June.