Council considers rates increase

Published: 22 April 2020

On Thursday 30 April, Napier City Council will hold an extraordinary meeting to consider options for setting next year’s rates.

Before the COVID-19 pandemic, Council proposed a rates increase of 6.5 per cent for additional water related projects, and other costs such as increasing regulatory compliance costs and asset depreciation.

However, the impact of COVID-19 on Council finances has been significant. Council now anticipates a rates deficit of around $3.1 million for the rest of 2019/20 and lost revenue of $7.5 million in 2020/21. The overall impact of the pandemic means that Council is now facing a funding gap for 2020/21. 

One of the options that Council will consider is the recommendation to use reserves to prudently fund the gap for the revised Annual Plan 2020/21, and reducing the rates increase to 4.8 per cent. 

The recommendation recognises the hardship faced by the community at this time. But it also strikes the balance of not passing significant rates increases on to future ratepayers, which is not considered prudent or sustainable. Much of the forecasted lost revenue is from our tourism facilities, community facilities, halls, sportsgrounds and pools that are not being used, as well as reduced regulatory income.

Napier Mayor Kirsten Wise says “Council is aware how challenging these times are for many in our community, which is why we are working hard to ensure we keep rates to a minimum. For the year ahead, we have identified operational savings of $3.6 million, which helped reduce rates by 6 per cent. We will endeavour to identify more efficiencies and further savings for the year ahead.”

Council will also look at how it can help ratepayers most affected by the COVID-19 pandemic, with various rates relief initiatives being considered, including:

• An additional rates rebate for the 2020/21 for those in serious hardship
• Rates remission and postponement options
• Reducing our rates penalties charges in 2020/21
• Providing rent and lease relief for commercial customers
• Waiving rates penalties when fourth quarter rates payments are due in June

All of these initiatives are in addition to the packages being offered by Government.

“When considering the options for setting rates in 2020/21, we need to strike the right balance between supporting the needs of those currently facing financial hardship without burdening future generations,” says Mayor Wise.

The Council meeting will be live-streamed on the Council Facebook page at 1pm on 30 April.

The community will be able to have their say on any change in rates as part of the Annual Plan consultation, which will likely happen in June. More information can be found at www.napier.govt.nz (keyword search #annualplan).

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