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Council approves 13.79% rates increase

Council this week considered all the submissions on the draft Annual Plan, and voted to make some changes, lowering the total rates increase for 2023/24 slightly to 13.79%.

Council consulted on the draft Annual Plan from 8-26 May, proposing to collect just over $7m more (or 16.9% more) in rates for the year ahead. The main drivers for this significant increase were inflation, asset replacement costs, water supply operating costs and the upcoming changes to the kerbside collection contract.

“We heard loud and clear from the community that we should keep rates increases as low as possible while the cost of living is so high,” said Mayor Adrienne Wilcock.

"Those rising prices impact Council even harder than they hit households, with Local government inflation (based on the Capital Goods Price Index) seeing increases of between 12.9% and 19%. That's because our “basket of goods” includes replacing pipes, maintaining roads, purchasing chemicals for water treatment etc, and a number of items in this basket rely on products that are in short supply worldwide."

“We heard strong feedback from the community that you want us to look to reduce services to get that increase down further – however, we aren't able to make significant cuts to Council services in our Annual Plan. We can make these changes in the next Long Term Plan though, and work is beginning on this now - we will be coming back to the community for some tough conversations over the next 12 months about what is affordable, and what services might need to change."

“We had already made a number of cuts to operating budgets, cut back our capital works programme and taken some risks in our budgeting to get the overall increase to 16.9% - and while we know 3% isn’t much, I was still pleased we managed to reduce this further.”

Council considered the feedback from all submitters, and determined to apply to the Department of Internal Affairs to use $800,000 of the Better Off funding (that is being allocated to Councils from Central Government as part of the Affordable Waters Reforms) to offset the rates increase for water  services. In addition to this, updated budgets showed that Council could expect to receive an additional $500,000 in water meter income (water users with extraordinarily high use, such as local industry, pay for water on a metered basis). These reduce the overall rates increase from 16.9% to 13.79%.

Mayor Adrienne stated "we are very hopeful that the DIA will approve the Better Off Funding to be used for this purpose. They’ve approved similar arrangements for other Councils, and we are specifically looking to spend this money on complying with the increasing regulations for drinking water – so we are optimistic that we will be able to use this funding to ease the burden on ratepayers.”

“This Council is striving to ensure that the decisions we make today aren’t going to have a flow on effect, or make things harder in years to come. We could have decided to apply for more funding from Better Off to offset this rates increase – but we’re well aware that this is a temporary reprieve. These are ongoing costs, so we’re reluctant to commit all of that funding to anything until we have more certainty about what is happening with the three waters reforms in New Zealand, and what that will mean for our ratepayers.”

The overall 13.79% increase will still impact different property types differently, depending on the value of your property and the services you receive. While the rates increase is still high, using the Better Off funding to offset the increases for water will mean that urban properties see a slightly lower increase that what was initially proposed.

Council staff are working on amending the budgets based on Council’s decisions this week – people will be able to see how the revised budget affects their property at mpdc.nz/rid from mid July.