Council response to the COVID-19 pandemic

Review the level of rates increase

The COVID-19 pandemic has had a profound impact on our lives. The Council’s initial focus has been on the welfare of its staff and on the well-being of those in the community in need of our support.

We have also turned our minds to the broader economic impact of the pandemic. A first step in this plan is to review the rates increase for the 2020/21 financial year starting on 1 July 2020. We had originally proposed an average 3.5% increase in line with our Long-Term Plan 2018-2028, but now believe that we should consider options to reduce this to a lower level. The planned rates increase will generate increased rates income of $2.8 million and the details of the impact of the rates increase for typical properties is set out in table one and table two.

What’s proposed?

Option 1: Proceed with proposed 3.5% average rates increase
(This is the basis on which this document was initially prepared)

The advantage of this option is that it will provide full funding for the Council’s plans, without the need to adjust budgets and spending plans. The disadvantage is that all ratepayers will be required to pay more at a time when many are under financial pressure.

Option 2: Seek to reduce the initially planned 3.5% average rates increase by identifying savings

The advantage of this option is that it will result in a lower rates increase than initially planned and would not require catch-up rates increases in the future. The disadvantage is that there is still likely to be a rates increase required as it will be difficult to reduce costs without having an impact on services and programmes. The level of reduction from 3.5% will depend on the Chief Executive identifying savings that reduce costs without impacting on the level of service to be provided to the community.

Option 3: No increase. Hold the 2020/21 rates at the same level as the 2019/20 rates

The advantage of this is that ratepayers will not have a rates increase from 1 July 2020. The disadvantage is that rates revenue in 2020/21 will be approximately $2.8 million lower than if we proceeded with the initially planned increases. The increases were particularly to help fund water supply improvements as well as the ongoing programme of roading and other improvements around the district, including the redevelopment of Rolleston Town Centre. This means that there may be a need for catch-up rates increases spread over future years to ensure these programmes are not affected.

Your say: let us know your views on the three options for rates increases in 2020/21.

Note: Rates assistance

The Council is putting in place arrangements to help ratepayers that may have difficulty paying rates such as by reducing penalties and allowing longer to pay. See the Council website for more information or call us on 0800 SELWYN (735 996).