What has Council decided about rates?
At its meeting on 17 June 2020, Council voted in favour of an approximate -1.8% decrease in rates income collected for the 2020/2021 year compared to the 2019/2020 year. This works out to a reduction of around $700,000 in Council’s rates income.
Will my rates go down in the next financial year?
Council will collect less income from rates overall, but that doesn’t necessarily mean a rates decrease for all households in the district. Some property owners will get a decrease, while others will have an increase in their rates. This is mainly because of the independent rating valuation carried out last year, which takes effect from 1 July 2020.
The way your rates will be affected by the valuation depends on whether your property value rose by more or less than the district average. A below average increase will likely have no impact on your rates or may mean you pay less. An above average increase in value could mean that even with Council’s decision to reduce its rates income for 2020/2021 you may still pay more in rates than you did for 2019/2020.
How can I check what my rates will be?
You can check your indicative rates on our Rating Database.
What is the connection between rates and valuation?
Revaluation does not increase the amount Council collects from rates, it just helps us to work out everyone’s share of rates.
An increase in your property value may not mean you will pay more in rates. A below average increase, when compared to other property values across the district, will likely have no impact on your rates or may mean you pay less. An above average increase could mean you pay more in rates.
Communities such as Hōkio Beach, where property values have gone up more than the district average, will have a higher rates increase. In some areas, such as Waikawa Beach, values have gone up by less than the district average and as such rates will either only have a small increase, stay the same, or may decrease.
Will the services and facilities Council provides for the community be affected?
There will be no reduction in the levels of service Council provides for the community in the 2020/2021 financial year, and no Council facilities will close because of the reduction in rates income.
However, the long-term implications of a rates income decrease for the 2020/2021 financial year are not yet fully known. This is because a number of factors, such as what goes into our Long Term Plan 2021-2041 budgets, will influence the implications this decision may have in the future.
How can Council afford to reduce its rates income?
Council achieved the rates income decrease in several main ways:
- We have reduced employee costs by $1,285,000 by freezing wages, limiting recruitment, making efficiencies and taking voluntary salary reductions.
- We have reduced our operating budgets by $452,865.
- We will borrow (loan fund) an additional $1 million to fund infrastructure renewals instead of paying for them with rates money.
- Proposed additional operating expenditure for the Levin Landfill has been removed.
- We have reduced interest costs by $795,000 by reducing the interest rate assumption from 3.75% to 3.0% for the 2020/2021 year. This change means the assumed interest rate more accurately reflects the expected cost of debt funds in the current economic climate.
- We have reduced spending on capital projects from $39 million to $25 million.
Do we usually loan fund renewals?
No. Our current approach is to loan fund asset renewals only as a last resort because doing so is not considered sustainable over the long term. Council’s decision to loan fund $1 million of asset renewals for this Annual Plan was inconsistent with our current Financial Strategy and Revenue and Financing Policy. Council will be reviewing the Financial Strategy and Revenue and Financing Policy later this year as it commences the development of its Long Term Plan 2021-2041.
Will capital projects still go ahead?
We still have some exciting capital projects underway that are important for the district’s progress. For example, we will soon begin two new roading projects on Queen Street that are being funded by Central Government’s Provincial Growth Fund. We are also looking at partnerships to ensure we are meeting our growth needs and creating employment opportunities in our district.
Will the splash pad go ahead?
Council allocated $50,000 to undertake preparations for a splash pad in Jubilee Park, including a feasibility study, site planning, stakeholder input and drawing up a design. Up to $400,000 of additional capital will be considered as part of the Long Term Plan 2021-2041, which Council will begin preparing later this year. This approach allows us to ensure the splash pad makes sense for our community before we commit to most of the costs.
Will this have an impact on our rates or Council services in future financial years?
The decision to borrow an additional $1 million to fund infrastructure renewals, instead of paying for these renewals with rates money, means that while rate payers may not fund these for the 2020/2021 year, there will be a small but ongoing cost for current and future ratepayers as Council repays the loan.
The full extent of implications of the rates income decrease for the 2020/2021 financial year will not be known until Council prepares the budgets for the Long Term Plan 2021-2041 later in the year. Possible consequences could include a rates income increase, as Council looks to carry out the works and funding intended to be undertaken in 2020/21, or a drop in levels of service in future financial years.