RATES RISE FOR 2020/2021 REDUCED FROM FORECAST
Over the past few months, Council has been working on putting together the Annual Plan for the next financial year, which goes from 1 July 2020 to 30 June 2021. An Annual Plan includes information on what services will be provided, what projects will be undertaken and how all of this will be paid for, ie the mix of rates, user fees and subsidies (where applicable). The 2020/2021 Annual Plan is based on year 3 of the 2018-2028 Long Term Plan (LTP).
Council produces a Draft Annual Plan each year. Under the Local Government Act 2002 (section 95, clause 2A), consultation is not required if the Annual Plan doesn’t differ significantly or materially from the relevant year of the LTP. When the 2020/2021 Annual Plan is completed, Council will compare it against year 3 of the 2018-2028 Long Term Plan to determine if public consultation is required. If it is decided that consultation is not required due to no significant changes from the relevant year of the current LTP, it does not mean that Council will not be able to consider other requests for funding and projects from the community. For 2020/2021, Council has included a $20,000 Contestable Grants Fund. Please watch our website for when applications to this fund will open, most likely September/October.
We advise that Council will always publicly consult on its Long Term Plans, which set out its goals, levels of service and finances for ten years. The next Long Term Plan will be for the ten year period 2021-2031 and will come into effect on 1 July 2021. Preliminary work is being undertaken now on the next LTP and consultation with the community will take place around March/April 2021.
Since work began on the Annual Plan, COVID-19 happened. We are more than aware that many people will be struggling financially now as families, businesses and the economy are negatively affected from the fallout of COVID-19. There have been calls to maintain rates at current levels, ie zero rates rise. Whilst this sounds like a good idea initially, it will cost the community more in the longer term. Just like inflation and increases in the cost of living can affect households, these also affect Council’s costs for its services and supplies. If we do not recover enough money to pay our costs this year, then we will have to charge more rates next year and in following years. Your Council believes doing this would be irresponsible.
Council have taken a hard look at its costs, ensuring only essential projects will be undertaken, efficiencies are made to reduce expenses and additional spending only authorised where there is a clear benefit or no other option. We looked for ways to reduce our costs without reducing our levels of service. We also want to do what we can to assist with the economic recovery of our District and the West Coast region without putting undue burden on our ratepayers. Council has made several applications for government funding for larger projects around our district.
Year 3 of the LTP forecast a rate rise of 3.66%. Taking into account inflation and new unavoidable costs such as insurance premium increases and the minimum wage rise, the first rates calculation came in at above the year 3 forecast. It was decided this was not acceptable given the current economic environment and therefore an alternative solution was required. By borrowing additional money for roading projects and decreasing the economic development rate take for next year, we are very pleased to present a 2.7% rate rise for 2020/2021. By reducing the economic development rate for 2020/2021, this puts money back into the pocket of local businesses and helps them to retain staff. We believe the proposed rate rise of 2.7% (just over inflation of 2.5%) is practical result in these hard times, without creating a bigger problem in years to come.
Our community has a long road ahead of it and Council will be doing as much as possible to aid our economic recovery. We have kept the rate rise for 2020/2021 as low as prudently possible and will continue to invest in our region by proceeding with scheduled projects and contracts, thereby assisting with local cash flow and job retention. We also encourage our community to show their support and shop locally.
We are aware that for some people and businesses, payment of rates will be difficult or will cause hardship and we urge people to make contact to see how we may be able to help. We have remission policies available for eligible home owners and businesses and a draft Rates Postponement Policy currently out for consultation.
To read more about the draft Rates Postponement Policy and have your say, please click here.
To read more about the Rates Remission policy, please click here.
Please stay up to date on the 2020/2021 Annual Plan progress on our website.