West Coast ratepayers may face 16.4% increase

Nicole Mathewson Reporter from The Press

By local democracy reporter Brendon McMahon:

The West Coast Regional Council is projecting a 16.42% rates increase for 2023-24.

That increase is mainly attributed to an explosion in Te Tai o Poutini Plan costs as it moves towards the formal hearing stage and the recommendation is that council double the rates component for the combined district plan when the draft annual plan is debated at an extraordinary meeting tomorrow in Paroa.

Council is projecting an operating funding deficit of more than $1.1 million in the coming year.

The increase under the draft 2023-24 annual plan is in line with year three of council’s 2021-31 long-term plan (LTP), which allows a 10% rates increase, and therefore a new round of public consultation was not mandatory.

However, the budget has been prepared in a context of “increasing pressures” on the ability of council to fund and deliver the projected 10 percent rates increase plus the cost of inflation, acting corporate services manager Katherine Harbrow says in the agenda.

“The LTP year 2 had projected a general rate 10 percent rate increase plus inflation however the 2022-23 Annual Plan that was adopted in September 2022 absorbed the inflation.

“This means that to meet the levels of service the general rate - excluding uniform charges - is now projected at an 16.42% increase for the 2023-24 Annual Plan.”

Rating differentials to be applied for the more than 20 individual river and coastal rating districts across the region where they had met - had discussed the rating required to complete the necessary maintenance, borrowing and capital expenditure in 2023-24.

But the burden of the costs for the combined district plan from the 2019 Order in Council for council to shoulder the costs for preparing, notifying, adopting, periodically amending, and reviewing the combined TTPP is telling however.

The council was ordered to fund it “by a rate set in relation to all rateable land” regionally and apart from an initial $240,000 from the Government, it has received no other help.

The three districts who are still funding their current operable district plans until the TTPP is passed do not contribute.

“The costs for the TTPP in 2023-24 are higher than expected in the long-term plan due to inflation pressure and under-budgeting of the hearing costs,” Harbrow’s report says.

As a result the TTPP rate component should “be doubled” to $1m from $500,000 this coming financial year, and again in 2024-25.

“The balance of the funding required in 2023-24 will be borrowed, unless alternative funding can be found. Alternative funding options are being followed up by staff.”

Overall, council is expecting subsidies and grants revenue of $16,514.741 in 2023-24 including money allocated via various central government streams for the infrastructure projects.

Its total revenue is expected to be $37.5m, with rates making up $10.8m of that.

The report notes the revenue included in the 2021-31 LTP “was too ambitious” and the forecast revenue is based on the current volumes of consents and compliance work.

Meanwhile, overhead costs had been reviewed so that external services such as council’s community resilience function bore a share of the internal overheads borne by IT, human resources, corporate services, property, and vehicle fleet.

“The method was changed to ensure all external services received a fair share of the costs in relation to their employee costs and fleet usage.”

Council’s Vector Control Services business unit has subsidies and grants revenue of $5.5m to cover expenditure and is projected to make a $618,692 return to council, after overheads.

*Local Democracy Reporting is Public Interest Journalism funded through NZ On Air