A projected rates increase of 9.98 per cent is looking to reduce to around 4.98 per cent for the next financial year (2020/21), as Council managed to reduce capital and operational spending largely due to the impact of COVID-19.

The reduction in spending was debated at today's Council meeting, held both in-person at the Council Chambers in Thames and online via video link. The unedited recording is available on our website at tcdc.govt.nz/meetings.

The budgets, rates figure and the fees and charges for the coming year will be fine-tuned and the final Annual Plan will be formally considered for adoption at a Special Council Meeting on 30 June.

“Thanks to all the Councillors and Community Boards for suggesting projects that could be deferred that aren’t essential,” says our Mayor Sandra Goudie.

“We are living through extraordinary times and an extraordinary year due to the impact of COVID-19 and I’m happy with the proposals put forward in making savings where we have been able to,” Mayor Sandra says. "Everyone had to make sacrifices right across the board for this Annual Plan. Everyone had to give a little to get a cohesive whole, but we must realise this is just for the one year and then we will be reviewing all of this in our Long Term Plan.”

A Long Term Plan (LTP) sets the Council’s financial priorities for a 10-year period and is updated every three years. The next one is for the 2021-2031 period and is being prepared now.

“This gives us a far more robust discussion for our next LTP to review service levels, revenue, the level of rates and capital expenditure programmes,” says Mayor Sandra. “This is a sensible approach, but we still have to face addressing the challenges that have already been expressed about escalating costs.”

How we got to 4.98 per cent

This infographic outlines the steps and decisions taken in the Annual Plan process up to now to get to the projected 4.98 per cent average rates increase.

• Capital expenditure - to build or buy new things like roads, pipes and water treatment plants – for 2019/20 is projected to be approximately $30.8 million, which is $12.2 million less than what was rated for. This equates to a 1.6 per cent reduction in the rates increase.
• The proposed 2020/21 capital expenditure programme was reduced by approximately $3.5 million to $31.4 million, which will reduce the rates burden in year one of the LTP (2021/22). In addition, many projects have been deferred so they can be considered in the 2021-2031 LTP.
• Operational expenditure adjustments include restrictions on recruitment and a staff salary freeze, a reduction in the training budget, reduced major events funding, deferred property maintenance and adjustments to the infrastructure work programme.
• These amount to a $2.51 million decrease in operational spending, which equates to a 3.4 per cent reduction in the rates increase.

Taken together, the reduced expenditure cuts the original 9.98 per cent rates increase to 4.98 per cent.

A smoothing loan of $6 million to spread the effect of increased costs across several years remains.

Our Council also opted to keep the Uniform Annual General Charge part of every property owner’s rates bill at $523.64, as had been forecast for the 2020/21 year in the last LTP.

The fees and charges for the year remain largely as originally proposed.

Background on our consultation process

The draft Annual Plan went to public consultation in March with a proposal to increase rates by an average of 9.98 per cent, a figure that had been arrived at well before the COVID-19 epidemic broke out and New Zealand went into lockdown.

The proposed rates increase, as well as proposals to increase some fees and charges, was to cover higher-than-anticipated costs of maintaining our current services, especially in the infrastructure and solid waste areas.

The spending plans contained in the proposed Annual Plan have been revised in light of submissions received in our public consultation, held from 10 March to 14 April, and the effects of pausing our capital works projects over the COVID-19 lockdown.

See the full agenda for today’s meeting on our website at tcdc.govt.nz/meetings.

More information on our Annual Plan, including the original proposals, is available on our website at tcdc.govt.nz/annualplan2020.

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