Council rates rise due to previous debt

At the Monday 11 June Workshop to review the Taupō District Council’s Long Term Plan (LTP) 2012-22, Councillors emphasised that the majority of the average 7.7% rates increase is due to pre-existing debt.

Councillors, responding to a full room of concerned ratepayers emphasised that the rates increase is primarily due to previous investment in infrastructure which has amounted to debt. The rates increase is:

• 3.0% due to the purchase of land, the construction of the East Taupō Arterial (ETA) and the payment for infrastructure for property development. Council was previously capitalising to pay for that debt and now recommending that the debt be paid through rates.
• 1.0% for the Water Treatment Plant in Taupō. Council has upgraded water schemes to meet the New Zealand Drinking Water Standards in Mangakino, Turangi and Taupō (on-going).
• 1.5% for the new Waste Water Treatment Plant
• The remaining 2.2% is allocated to the running of the District and includes the services that Council provides.

 

The Councillors also conveyed that the rates increase is a separate issue from the rating system. Councillor Chris Johnston says that the decisions were tough and personally emotional. He says that the LTP remains a highly charged issue in the community. “We acknowledge that there are still many in the community who are upset about the capital value rating system.”

He says: 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. “We recognise that the degree of change from the land value system to the capital value system was too much for some people. This revised version of CV is significantly different. We responded to the community’s concerns about the industrial and commercial sector and added a differential of 1.8 for the commercial, industrial and accommodation sectors to address that concern. We also added a transition plan to phase in the change over a three-year period.”

The Council is focused on managing the growing debt and rates increases over each of the next three years. To reduce the projected debt over the next ten years, the Council has made fundamental changes to its business which is reflected in the LTP. To reduce the projected debt, Councillors have cut capital expenditure by $67m. This includes 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.

 

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 Taupō 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 Taupō District Council’s freephone 0800 ASK TDC or read the documents online here.