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Napier City Council decides on proposed rates rise, to go to consultation

Full Council Triennial Meeting Nov 2019 1

Napier City Council has unanimously agreed to propose an average 4.8% rates increase.

At an extraordinary Council meeting earlier today, Councillors discussed a report outlining details of the financial impact of COVID-19 on the 2020/21 budget, along with the effect on services and operations.

The impact of COVID-19 on Council finances has been significant, with an anticipated 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 facing a funding gap for 2020/21.

The report also provided planning assumptions to guide budgeting for 20/21, and presented a shortlist of options to fund the operating deficit.

Much of the forecasted lost revenue is due to closed tourism facilities, community facilities, halls, sportsgrounds and pools that are not being used, as well as reduced regulatory income.

Preferred option

The preferred option is a rates rise of 4.8% with the recommendation to fund the operating gap of $6.74m from Council reserves, $4m from the Parking Reserve, and $2.74m from the Suburban and Urban Growth Fund.

“The impact of Covid-19 on Council business activities, plus the loss of Council income and the proposed relief package has resulted in a total rates impact of 11.96 percent, in addition to the original proposed increase of 6.5 percent. Recognising the hardship faced by our community at this time, this of course was never an option and we have worked very hard over the past four to five weeks to reduce this,” says Napier Mayor Kirsten Wise.

“The proposed increase strikes the right balance between supporting those in need now and stimulating the local economy. Our overarching aim is to be as fair and equitable as possible and ensure nobody falls through the gaps.”

“A blanket rates freeze was rejected because it does not help those who are most in need. It would also place undue burden on our future ratepayers.”

“For the year ahead, we have identified operational savings of $3.7 million, which helped reduce rates by 6 percent. We will endeavour to identify more efficiencies and further savings for the year ahead,” says Mayor Wise.

Ratepayers and residents will have the chance to provide feedback on the rates rise and how the deficit could be covered during the Annual Plan 2020/21 consultation. The consultation start date has been delayed until mid-June. Council needs time to revise the draft Annual Plan before consultation, which means it is not expected to be adopted until 27 August.

More information can be found at www.napier.govt.nz (keyword search #annualplan)

Council is also working on its pandemic recovery response.

“A range of actions have been developed to support businesses and individuals facing hardship. I want Napier people to know that we are working hard to ensure that our city comes out of this pandemic in a strong and resilient position,” says Mayor Wise.

Residents will have the chance to provide feedback on Council’s proposed rates relief options and other recovery initiatives in the draft Annual Plan 2020/21. These include:

  • A residential and commercial rates rebate in 2020/21 for those in serious hardship
  • Rates remission and postponement options
  • Reducing our rates penalty charges during the first two quarters in 2020/21
  • Providing rent and lease relief for commercial customers
  • Removing rates penalties for last quarter this financial year 2019/20

Council’s website provides a range of information and links to help people navigate through the various pandemic Alert Levels – www.napier.govt.nz (keyword search #recoveryplan)

5 May 2020

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