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Our draft budget - projected rates increases for the next ten years

Annual rate increases will not be more than 6%, except for years one and three. The proposed rates limit for year one is 11.85% and year three is 10.20%. The average increase over the next ten years is proposed to be 5.93% per year. This includes all the projects we have outlined in this document. 

Projected rates increases for the next 10 years

What’s driving the 11.85% increase?

In 2021/22 we are proposing to collect an additional 11.85% in rates compared to the current year. 1.5% of that should be covered by new ratepayers as our district continues to grow. This is the largest single increase in rates our Council has had in many years.

You may see a similar level of increase at other councils around New Zealand, especially where they have maintained lower rate increases in recent years, and had low/zero increases last year due to COVID-19 as we did. That is because a significant portion of the increased costs is being driven by external factors affecting the very core areas of our business – it’s the escalating cost of collecting and disposing of our rubbish and recycling, and the cost of complying with increasing standards for the supply of drinking water (both of which have been underfunded in the past few years).

It’s also the costs of complying with increased environmental standards for the discharge of storm and wastewater, and increasing contract costs to maintain our roads. We are also committing to some new staff positions to improve engagement with community and iwi, and continuing to progress our digital strategy.

What’s causing the spike in rates in 2023/24?

Our current contract for waste services (kerbside collections of rubbish and recycling, and transfer station operation) ends in 2023 and we anticipate that the contract rates that we have been paying for the collection service in the past will not be sustainable – we’ve projected a significant increase in costs from 2023 onwards. We are also proposing a move away from rubbish bags, to using a wheelie bin instead. So while targeted rates would increase to pay for the wheelie bin collection, you would no longer have the cost of purchasing rubbish bags.

Why not smooth out these large spikes in rates?

In year one and three of this plan - the jump in costs is considerable, and to try and smooth these costs over the following years would be “kicking the can down the road” - we feel we need to face these head on and catch up. Smoothing is part of our strategy once we are back on an even keel.