What’s the impact of reducing the level of rates funded depreciation?

Cutting funding for depreciation will significantly lessen the sting of the rates increase. However, such a decision will have longer-term impacts on our district.

  • Non funding or reduced funding of depreciation now will incur a subsequent depreciation funding deficit. This deficit will have to be reinstated over the following years, to ensure ratepayers, now and in the future, pay for their share of the assets use. The smoothing of this funding will lead to an additional increase on rates over the next few years.
  • If we reduce depreciation funding too much, this will add additional cost to future ratepayers and/or slow the rate at which infrastructure can be improved or replaced in the future. 

 

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