June 28, 2012.

Council sought balance between investment and affordability

Council has struck its rates for 2012/13 which will result in an average 5.9% rise across the district, well down from the double digit rates increases previously forecast.

Mayor Jenny Rowan said Council had sought a sensible balance between progressing urgently required investment that would help take the community forward, and one of affordability.

“It is never easy saying no to some things and yes to others and I have to commend this Council. It has been prepared to make hard decisions in the best interests of the long term development of Kapiti.”

The 5.9% increase is equal to $2.24 a week per property. This will vary slightly depending on the ward it is in, land value of the property, and the effects of the three yearly revaluation of the District. The following figures include GST.

The average urban increase for Paekakariki is 7.78%, equal to $2.94 a week. The rural increase is 1.17% or $0.27 a week.

The average urban increase in Paraparaumu/Raumati is 5.46% or $2.19 a week. The rural increase is 9.08% or $2.08 a week.

The Waikanae urban increase is 6.57% a week or $2.62 a week. The rural increase is 8.69% or $2.06 a week.

The Otaki urban rate rise is 5.03% or $1.81 a week. The rural rise is 7.57% or $1.90 a week.

Mayor Rowan said Councillors had worked hard to reduce the double digit rates increases that had earlier been forecasted. “Over a number of months we have been working through activities and budgets line by line. In the end we have managed to strip around $50 million out of the capital works programme for the next 10 years without reducing services.”

The decision on water meters had been important for two reasons: conservation and cost.

“We expect water meters to lead to a change in the way residents use reticulated water. This is expected to result in a reduction in peak water demand of around 25%. We anticipate saving a further 5% through better leak detection. This reduction in demand means we will be able to delay spending up to $36 million on water supply infrastructure.

“If we had chosen the dam as our first option, then we would be spending significant money up front as there is no ability to stage such a development. We would also have faced the additional cost of expanding the network to cope with the unrestrained demand for water. These combined costs would have added at least 3.75% to the rates and clearly that was not tenable.”

Mayor Rowan said Council was mindful of the impact of the rates increase. “Given this, we have introduced a new rates remission policy for those suffering financial hardship. This is in addition to the scheme run by Central Government.” Council would be publicising details of the policy in due course.

Long Term Plan highlights

Five priorities set for this triennium

• Economic development
• Water supply/meters
• Coastlands Aquatic Centre
• Civic Administration Building
• Managing the impact of the proposed Expressway

Water meters

• $36 million saved
• Peak water demand reduced by estimated 25%
• Better leak detection saves 5%
• River recharge can be staged
• Lowest cost option for residents

Financial strategy

• $50 million in capital expenditure deferred over 10 years
• No cuts to services
• Priority projects still go ahead
• CPI absorbed in a number of areas for 2012/13

Rates

• 5.9% average increase for 2012/13
• Average 6.4% over first five years
• Average 4.9% over 20 year outlook
• Rural village differential changed from 60% to 65% of urban rate (fairer)
• Rates remission of up to $300 per property available for those facing extreme financial hardship. This is in addition to Government rebate

Debt

• Prudent debt management strategy managed within agreed conservative parameters
• Cost of new assets will be spread across generations that most benefit
• Maximum of 30 years on each loan
• Aggressive debt repayment programme from 2016/17

Other key projects

• New District Plan will be notified by the end of November 2012 with submissions and decision process happening in 2013
• New economic development strategy. Some services will be delivered in-house or through results-focused external contracts
• Seed funding of $1.5 million to support extension of Clean Technology Park in Otaki
• Youth Centre budget brought forward to 2014/15 with further analysis and work scheduled in the intervening period
• Waikanae Library and Mahara Gallery joint upgrade deferred until 2015/16 to give Gallery Trust time to raise remaining funds

ENDS

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