Kawerau Shaves ‘Just Shy Of 3%’ Off Rates Rise

Sunday, 16 June 2024, 6:55 pm
Article: Diane McCarthy - Local Democracy Reporter

Kawerau residents are being warned to expect reductions in services as a result of the council shaving 2.9 percent off this year's proposed rates rise.

“For every saving, there has to be a cost,” Mayor Faylene Tunui said.

The council had previously proposed an average rates' rise of 15.1 percent in its draft annual plan for 2024-2025.

After consultation, the council asked staff to make savings to reduce the rates.

Chief executive Morgan Godfery presented council with a report on Wednesday, giving a list of recommendations that could save a potential $382,500.

“Taking the savings together, the revised rates requirement for the 2024-25 year would be 12.2 percent, representing a saving of just shy of 3 percent,” Mr Godfery said.

Personnel costs made up the bulk of the savings.

Not establishing new staffing positions in governance support, policy and planning, finance and administration, as originally proposed, are among the savings.

The council would also not fill currently vacant positions in parks and reserves and events management.

This would create a saving of $213,000, which led to a 1.6 percent reduction in average rates rises.

As a contingency, the council would set aside a budget for contractors to guard against some of the strategic risks that could occur due to not having those additional staff members.

Mr Godfery noted that not going ahead with filling these positions would result in some small reductions in service.

Deputy mayor Aaron Rangihika addressed comments to the public during the meeting, saying that their voices had been heard.

“Yes, you weren’t happy with 15.1 (percent) and, yes, your council went back, with their management team, and tried to find you some cost savings.

"I do believe that, with these savings, there will be services that will have a lesser function or they may not be delivered.

“Parks and reserves, roading, footpaths, rubbish collection, water, stormwater. These things will be impacted in the future.”

He thanked the management team for the work they had done to drive the rates down at a time when councils all around the country were struggling with increased costs.

“These are tough times, they’ve got to do a lot of work and they’ve got limited resources,” he said.

Councillor Sela Kingi asked that the public show their support for council staff who would be under added pressure due to lower staff numbers.

“We ask you to be kind to our kaimahi when you see them out there, because it impacts on them as well.”

Another $114,500 was saved by reducing the depreciation funding on assets from the amount in the original budget. Depreciation is money the council must set aside so they can afford to replace an asset when it reaches the end of its life.

The council had already increased the level of depreciation it did not fund to 35 percent in previous years and had planned to reduce that figure to 30 percent in the coming financial year. By leaving the figure at 35 percent it would decrease the rates requirement by 0.8 percent.

Savings were also found by adjusting the timing of uplifting loan financing to benefit from new interest rate projections, and not allocating the usual $10,000 Community grant to Neighbourhood Support.

Mr Godfery said the organisation was “not in a space to claim that grant”, which had been set aside for them.

A Uniform Annual General Rate of $900, midway between the two figures of $950 and $850 that were consulted on, was selected based on feedback from submissions.

Council voted to accept the revised budget for inclusion in the Annual Plan 2024-2025 for adoption on June 26.

© Scoop Media

Local Democracy Reporting

Content from the Local Democracy Reporting (LDR) service is published by Scoop as a registered New Zealand Media Outlet LDR Partner.