Rates Smoothing

Like many Councils in New Zealand, we’re facing big financial challenges. On average, local Council rates are going up by 15%. In the Tararua District, we need to increase our rates by 16.29% in 2024/25 to deliver on our responsibilities to our community.

We know this is a large increase, so in this Long Term Plan (LTP) we’re exploring ways to lessen the financial impact on ratepayers. To get here Council had prioritised the capital projects, reduced operational budgets and focused on delivering on its core activities.To lessen the financial impact further we are considering delaying our depreciation funding and smoothing the rates increase in Year 1 of the LTP by spreading it over the first 3 or 6 years. This means instead of one big jump in 2024/25, ratepayers would see incremental rises over time. For example, if we smoothed rates over 6 years, Year 1 becomes an 10.30% increase. You can see the full breakdown in the table below:

Background

Financial budgeting and forecasting is extremely complex, especially in today’s financial and regulatory landscape. High interest rates and inflation, increasing compliance coupled with changes in key central government policies like the three waters legislation, is causing a lot of financial uncertainty for local Councils.

Everything we do is costing more to deliver and managing these rising costs with a small and sparce rate payer base over a large geographical area, is an added layer of complexity.

Key to these challenges is our three waters infrastructure, that’s stormwater, wastewater and drinking water. These are almost exclusively funded by rates and make up the most of Council’s capital expenditure. A large portion of our infrastructure is already ageing and underperforming, requiring replacement or significant upgrades in the near future.

In spite of the uncertainties, we have no choice but to make some tough decisions now.

What's happening now?

We’re looking at every area of council expenses, trimming budgets where we can and delaying non-essential work. We’re also more than doubling what we’re borrowing to adapt to huge project costs for water, wastewater and regulatory compliance.

Knowing exact costs is difficult and regrettably, it’s not something we can guarantee. As a Council, we’re moving forward with the best information available, fully aware that uncertainties still loom large.

Here are the options:

• Option One: Not apply any rates smoothing.
• Option Two: Apply rates smoothing over 3 years.
• Option Three (our preferred option): Apply rates smoothing over 6 years.

More information on the options can be found in the document below.

Filling out the online form above is the easiest way to have your say. However, you can also download a submission form (PDF file, 65.2 KB) and return it any of our customer service centres or libraries.