Long Term Plan fiscally responsible

Taupō District Council has adopted its Long Term Plan 2012-22 (LTP) which establishes a strong financial foundation for the District moving forward. After a review by Audit New Zealand stating that the plan and process met all the Audit requirements, Council signed off the LTP, setting the direction for the District for the next 10 years.

Councillors voted five to three (with one abstaining) to go ahead with the plan and set the rates. As part of the move to more prudent financial management, Council worked to reduce the debt, while managing rate increases and maintaining levels of service. Council has cut or deferred $60 million of capital expenditure and cut $45 million from the projected debt to $159 million (from $204m) by 2022.

This will include: only allowing for the basic repair to the AC Baths, delaying water treatment plant upgrades (to meet New Zealand drinking water standards) while ensuring that all schemes have security of supply and reducing expenditure on transport projects that would not attract NZTA subsidy (though investment in the rural seal extension programme would continue).

The 7.7 per cent average total rates increase per ratepayer for next year is Council’s response to service inherited debt. Deputy Mayor, Mike Downard says that Council inherited debt relating to building the wastewater and water treatment plants, paying for the East Taupō Arterial (ETA) and the surplus land around it, and the infrastructure for property development. This totals $65 million and accounts for 3 per cent of the rates increase each year for the next three years. He says: “We are taking this debt seriously and have decided to no longer capitalise interest on the loans, but instead to fully fund it out of rates.”

In addition, Council moved from a land value to a capital value rating system for the general rate – a move made by more than 60 per cent of New Zealand Councils. However, in response to community feedback during the LTP process regarding the degree of change from rating systems, Council revised the rating system to benefit more rate payers and made steps to smooth the effects of the change. To do so they will:

• Continue to use the Taupō Electricity Ltd (TEL) Fund to subsidise about $4 million in rates annually,
• Add a differential of 1.8 for the commercial, industrial and accommodation sectors and
• Amend its remission policy to include a three-year transition period with a review in the 2015 Long Term Plan.