Council reduces debt and adopts a revised rating system

Taup? District Council, poised to adopt its Long Term Plan (LTP) 2012-22 in June, is giving early signals of its direction for the District. To reduce the projected debt over the next ten years, the Council will make fundamental changes to its business.

Following significant community feedback, a record of more than 1,800 submissions as well as petitions, the Councillors deliberated about many issues to drive the District forward. Some of the key issues included how to manage the growing debt, the proposed rates increase over each of the next three years and the proposed change from a land value to a capital value rating system.

To reduce the projected debt, Councillors have proposed to significantly reduce capital expenditure by $54m. This would include: allowing for only the basic repair to the AC Baths, delayed expenditure for limited upgrades to water supplies to meet drinking water standards (while ensuring that all schemes have security of supply), reduced expenditure on transportation projects that would not attract NZTA subsidy (though investment in the rural seal extension programme would continue), $13m removed from the asset renewal budget and a reduction in the public arts budget by $75k per annum.

Deputy Mayor, Mike Downard says that in this challenging economy Council is taking debt more seriously than ever. “The feedback from the community was that Council should cut our coat according to our cloth. That message came through loud and clear.”

The Councillors have also signalled that they will make the tough decision of a change from a land value to a revised version of the capital value (CV) rating system. Councillor Downard emphasised that the proposed change is significantly different than what was proposed in the draft LTP. He stated that this version of CV is not the “pure” model that the community saw in the draft LTP as it gives two differentials and has a transition plan to phase in the change over a three-year period.

He says: “Fundamentally, we believe it will iron the inequities out of the system and will require ratepayers such as the industrial and commercial sector to pay their fair share. Council has reviewed the rating system and has worked hard to manage the degree of change to the most affected ratepayers so they would not get a great increase all at once.”

The rates increase, which is separate from the rating system, is due to Council’s investment into vital infrastructure such as water treatment plants to meet the government standards for safe drinking water. In looking to trim costs, the Councillors reviewed operational budgets. “We looked at all aspects of the business to trim costs,” Councillor Downard said.

In addition, Council is signaling that it will invest in economic development as a way to stimulate the economy to help generate income and bring in jobs. “As the architects of our fortune, we have to invest in economic development to attract business to our District.

“The global financial crisis has had an impact on the projected growth in properties in the Taup? District and we’ve had to adjust our focus to managing debt within our prudent and balanced financial model.”

In March, the Council put forward the draft plan to the community for input, consulted with the community and held hearings for those who wanted to publicly voice their feedback. The LTP is the 10-year plan that sets the direction for Taup? District. It is the strategic planning document for the services, activities and priority projects to be delivered by Council from 1 July 2012 to 30 June 2022. The final plan is to be adopted on 26 June 2012 after a review from Audit New Zealand.

For all enquiries about the consultation documents and the submission process, please call Taup? District Council’s freephone 0800 ASK TDC or read the documents online at www.taupo.govt.nz