26 June 2013

Annual Plan sees lower than forecast rates rise

Thanks to tight control on expenditure and an innovative solution to wastewater, South Taranaki urban ratepayers will see a very modest 1-2% total rates increase for the 2013 -2014 year after the South Taranaki District Council adopted its Annual Plan today.

The Plan was adopted after a month of public consultation in which 74 submissions were received.

The Plan includes a District Rate* increase of 3.9% and Targeted Rate increases for water, wastewater, kerbside rubbish and recycling of $17, $26 and $20 respectively. This represents a total rate increase of just 1-2% for most urban properties, however due to an average 8.2% jump in the value of dairy farms the average rural property is looking at a 4-5% increase.

In addition, some rural properties will be impacted by a rating change which will see all dwellings (houses) on a farm charged a uniform annual general charge (UAGC), as already happens on all urban and commercial properties.

Mayor Dunlop says the reason for the change was about consistency. “All urban residential and commercial properties already pay a UAGC for multiple dwellings however rural properties, until now, have been exempt. You simply cannot justify charging one type of property with multiple dwellings on it differently to another and the policy simply brings those rural properties that have enjoyed an exemption into line with residential and commercial properties which have been paying full UAGC’s on multiple dwellings for some time,” he says.

In response to public submissions changes were also made to the initial Annual Plan proposal including support for a $30,000 grant for Opunake’s Everybody’s Theatre, an extra $4,000 on top of Sport Taranaki’s existing annual grant, an additional $71,000 for the Eltham Town Hall roof replacement and deferring various playground upgrades. Council also agreed to change its proposal to introduce a UAGC on individual subdivisions. Instead the UAGC will only be charged once subdivided sections have been sold.

Mr Dunlop says he was pleased Council was able to significantly reduce its rate increase from that projected in its Long Term Plan without any change to the Council’s service levels or capital works programmes.

“I think this Plan strikes the right balance between affordability and funding the services and activities that help make South Taranaki such a great place to live,” he says.

Part of the reason for the reduction in the rate increase from that contained in the Long Term Plan was Council’s innovative use of bacteria to breakdown wastewater sludge which would otherwise have to be mechanically removed at great cost. “Our bacteria trial to date has shown excellent results with an estimated 22% of the sludge removed. Because of this, the Council has been able to defer almost $3 million of planned expenditure from the 2013/14 budget and if the trial continues to be as successful as it has been to date, it will result in saving $3.7 million over the next four years,” he says.

The 2013-2014 Annual Plan comes into effect from 1 July 2013.

* The District Rate is made up of the General Rate, Roading Rate and the Uniform Annual General Charge

Key features in the 2013-14 Annual Plan:

Total expenditure is $56.3 million - $800,000 less than projected in the 2012-2022 Long Term Plan

24% of total Council operational expenditure will go into one activity – Roading

61% of total Council operational expenditure is on the 3 core activities of roads, water and waste.

38% of Council’s projected income will come from sources other than rates – 14% will come from the Council’s Long Term Investment Fund.

The value of the Long Term Investment Fund is projected to increase to $112.3 million compared to the earlier projection of $111 million in the Long Term Plan.

Total debt is projected to be $133 million by the end of 2013/14. If the ‘bugs’ trial to de-sludge Council’s wastewater ponds continues to be as successful as it has been to date, a further $3.7 million will be removed from debt projections.

Construction of the $11 million Waimate West Water Treatment Plant will be finished. This will complete the programme of major upgrades to the district’s water infrastructure.

$3.4 million budgeted for replacement of water pipes throughout the district.

Total capital expenditure is $24.5 million. ($3.3 million less than projected in the Long Term Plan)

ENDS

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