Annual Plan 2023/2024

Annual plans are how we deliver our long-term plans (LTPs) year on year. They identify our budget and activities, the resources to deliver them and where the resources will come from, for example rates or user charges.

In the same way, our national taxes contribute to the running of the country, Council rates are important to ensure we continue to function and deliver the services to our communities.

We set our rates based on the needs of the community, demand for services and affordability of rates.

This year’s budget includes a proposed rates increase of 13.18%.

This table looks at the proposed average rates increase in NZ dollars for ratepayers.

We have looked at every single Council operating cost and rationalised budgets as much as we can. We have looked hard at every service, programme and project on our books to find areas where scope can be reduced, or we can delay nonessential work. We have taken steps to reduce costs, including deferring decisions about some new additional funding to next year, and increasing some user fees and charges.

Without the interventions listed above, the rates increase would be over 20%.

Any further reductions to reduce rates would require a reduction in the service levels. This will be a discussion that Council will have during the LTP 24-34 process.

The activities where we had significant cost areas, we are unable to reduce service levels (example water, wastewater, roading and solid waste). We have, where possible, significantly increased fees & charges to reduce the overall rates impact.

A significant portion of this year’s proposed total rates amount is due to fixed cost payments that are beyond our control. These include

• increasing interest payments on our debt
• high inflation which is pushing up the price of goods and services
• disruptions in the supply chain
• the ongoing increase in compliance and regulations that Local Government must keep up
• our infrastructure is already ageing and under-performing, which means we’ll have to replace or significantly upgrade it in the coming years.

Depreciation funding is a way to account for the wear and tear of assets such as bridges, roads, parks, and water treatment plants over time. These assets need to be renewed or replaced eventually, and depreciation helps to calculate the cost of this process. By funding this depreciation through rates each year, ratepayers can contribute their fair share towards the use of these assets, both currently and in the future.

By increasing the level of depreciation that we are un-funding, Council may not have the required reserves to pay for replacement of assets in the future. Council would need to borrow the money to replace the assets. There is a risk that Council may not be able to borrow all the money it needs as there is a limit on the amount Council can borrow.

Hence, we have recommended repaying the amount of reduced funding over the next 10 years.

Each ratepayer pays for different rates depending on where they live and what services they are rated for.

Urban and Industrial/Commercial ratepayers are primarily in the urban areas that are connect to the Water and Wastewater networks and they have large cost increases in this area.

Using rates for the urban sector (very similar to Industrial/Commercial ratepayers) you can see that  the four waste and wastewater alone make up 86% of the overall rates increase.

The funding council has received for the 3 Water Transition is covering the additional costs required to provide information and work with Central Government over this time. A portion of this funding has been used to offset staff costs for completing this work ($26k).

The use of these funds also had to meet specific funding criteria and as such we cannot use it to offset rates. They had to be for specific projects that are either new or used to accelerate, scale-up and/or enhance the quality of investment already in our Annual Plan/LTP.

Council is able to propose a rates increase higher than the LTP. The Financial Strategy is a guiding document for decision making and ensuring Council is making prudent decisions. As the levels of inflation and interest have changed significantly from the time the LTP was set, to keep rates below the level of the LTP would require a reduction in the service levels ratepayers have asked for.

Targeted rates are paid by a specific group of ratepayers who receive a specific service - for example:

• water targeted rates for properties connected to our water supply
• Kerbside recycling targeted rate for properties that receive kerbside recycling.

We are – most of our major projects are debt-funded, and paid back over a long period so that the people who use them help pay for them. But we’re also providing services that we can't use debt to cover these costs. It's similar to using a loan to cover everyday expenses like groceries. It is not financially prudent in the long or short term.  And we are subject to the same cost pressures everyone else.

Consultation opens on 27 April and closes on Friday 19 May

Hearings will be held on 7 June 2023

Deliberations will be on 14 June 2023

Adoption of the Annual Plan is 28 June 2023.

The Annual Plan is the community's plan - ultimately the Mayor and Councillors approve the final plan. The critical input into their decision making however is community feedback through consultation.

Councillors set a proposal(s) for the Annual Pan plan in early 2023 which then is provided to the public for consultation.

The consultation will lay out Council's proposal along with alternative options and the benefits, costs and risks of each. Councillors then review public feedback once it is in and make their final decision of what is or is not in the plan.

There are several ways to help people manage their rates payments, such as spreading your payments into regular affordable amounts across the year using direct debits.

With Central Government, we have a rates rebate scheme that provides a reduction in rates to those that meet set low-income criteria.

*    if you are on a low income, you can apply for a Government rates rebate at: www.govt.nz/browse/housing-and-property/getting-help-with-housing/getting-a-rates-rebate

If you are worried about paying your rates invoice, please get in touch with us as soon as possible at rates@tararuadc.govt.nz or call 06 374 4080 (north) or 06 376 0110 (south).

There are also multiple ways to pay your rates: online, by direct debit, internet/telephone banking and in person at our Service Centres.

The Council makes decisions on what projects and programmes are in and out of the budget every three years as part of the Long-term Plan process. This is a 10-year plan that allows us to map out the future of our district. This Annual Plan is year 3 of the 2021-31 Long-term Plan. Many of the projects in the plan have already started, were decided and consulted on separately by the Council, or are part of a wider multi-year programme. They are also funded through our Capital Expenditure budget, not the current year's rates. Rates pays back the debt over time, including any interest and depreciation. Stopping a project might have an impact on future rates but is unlikely to significantly impact the current year.

We will be consulting on the proposals in the Annual Plan in April / May 2023. Following that the final plan is due to be adopted by Council by the end of June 2023 and will then be available on our website from July 2023.

You can give your feedback and have your say on the Annual Plan via Your Say Tararua. However, all big changes to our plans or new projects will need to be done through the Long-term Plan. We review this 10-year plan every three years and are in the early stages of this process.

The Council uses property values to allocate the rates we need to collect between all ratepayers – we don’t collect more rates just because values have increased and we don’t collect less rates if values have decreased.

Property revaluation doesn’t affect the amount of money we collect from rates – it helps us work out everyone’s share of rates

Elected Members (councillors) contact details are listed here.  You will find their contact details there to invite them to speak at your event.

You can provide feedback using “Your Say Tararua”, using the submission form in the Bush Telegraph (Monday 1^st May edition), email Council at submissions@tararuadc.govt.nz or come into our Libraries and Service Centres where our staff can help you. Alternatively, you can print off the last two pages of the consultation document and send your feedback to us by FreePost.

You can leave feedback on any of the topics covered in the proposed Annual Plan.

All feedback or submissions are classed as public information because, within local government, we are obligated around decision making to be as transparent as possible. Your name and any organisation you represent will be published online, however, we won't publish any personal contact or address information.

No, you are not obliged to appear at a hearing but you have the right to make your submission personally.

If you wish to make your submission personally, please indicate this on your submission

Our hearing date is on the 7 June 2023 - the time will be published on our main Tararua District Website at Agendas & Minutes