Proposed Rates - Balancing affordability and service

4 months ago

We invest prudently to deliver real value to everyone in the region. We have a sound track record in financial management, with an AA credit rating from Standard and Poor’s.

A key priority is to keep rates as fair and affordable as possible, while delivering the level of service our region needs. You have told us over many years what’s important to you and that you want us to deal with the key issues. We have prioritised, looked at ways to keep the rates down, and scheduled programmes of work in the coming years to reflect this.

The proposals in this draft 10-Year Plan require an increase in rates of $8 million in 2018/19 and $75 million over the 10 years of the plan. This equates to an average rates increase of 6.7 percent for the 2018/19 year. In the next three years the average rates increase will be 6.3 percent and over the 10 years of the plan the average annual rates increase will be 5 percent. The increases may be lessened by our growing rating base, as population growth is at historically high levels.

The proposed average increase in residential rates across our region in the 2018/19 year is $30.89 (GST inclusive), or $2.57 a month.

To calculate your own indicative rates under our proposed 2018/19 rates please visit http://www.gwrc.govt.nz/regional-rates-calculator/

The key drivers of this increase are shown in the diagram below. Many of our increased costs relate to ongoing programmes and the increased cost of doing business, rather than new initiatives. This includes our key programmes, ongoing public transport transformation programme, our flood protection programmes and our freshwater and biodiversity programmes. We are also facing increased costs
resulting from the aftermath of the Kaikōura earthquake – including more expensive insurance and rent.

In 2018/19 we are introducing a range of fare discounts for public transport users including students, children, people with disabilities and off-peak travel. We consulted with you on these last year and there was overwhelming support for the discounts.

We are also investing in improvements to our core systems and capability, to ensure we are able to keep up with technology change and provide efficient services.

There are also some good news stories, with significant savings from the increased fare revenue we will receive as a result of more people using public transport, as well as from reduced costs for the new operator contracts we have negotiated for the bus network.

The region has also paid the final instalment for the debt we incurred with the construction of Westpac Stadium, which first opened in the year 2000.

The following diagram shows the key drivers of change (both ups and downs) underpinning the first year of the 10-Year Plan.

The proposed changes to rates for average value residential, business and rural properties are outlined in the rates, including the proposed changes under the Revenue and Finance Policy consultation are:

Impact of the proposed changes to the Revenue and Financing Policy in 2018/19 (please note these are averages for residential properties only)

Water Levy

Greater Wellington charges a water levy to the four city councils (Wellington, Hutt, Upper Hutt and Porirua) for the delivery of bulk water. This is on-charged to ratepayers through city council rates.

We plan to increase the water levy by 7.1 percent ($2.2 million) in 2018/19, with an annual average increase of 4.6 percent across the 10 years of the plan. The increase in 2018/19 is driven by additional investment and ongoing costs required for water treatment at our Waterloo plant to resolve potential water quality issues following the November 2016 earthquake. Beyond 2018/19, the levy increases are due to
increased investment in water supply resilience, principally the cross-harbour pipeline detailed in our Infrastructure Strategy.

For more details on rates download the 10-Year Plan consultation document.

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