Councillors will consider the proposed budgets for the Annual Plan for 2025-25 at their extraordinary meeting on Tuesday 8 April.
Council recognises the financial pressures on our ratepayers. Within this plan adjustments have made to mitigate the impact of cost increases where possible.
For almost all of council’s activity, the overall general rating increase required to maintain current levels of service is 2.65%, which is very close to the cost of inflation. However, the costs of providing infrastructure, in particular roading management and compliance with government requirements for drinking water, are driving significant cost increases in the order of 20% in these areas.
When combined this equates to an overall average increase of 12.06%, which is 1.26% higher than the amount indicated in Council’s 2024-2034 Long-Term Plan.
Councillors have requested that some costs are borne by those who use particular services and facilities. This approach, in an environment where costs in general (for example insurance) are rising at rates much higher than inflation, helps reduce the general rate burden on those who do not receive those services or use certain facilities. Combined with a strong focus on core services and projects, the increase in rates required to deliver most of council’s activities are close to the cost of inflation. This plan represents a Back to Basics approach as required by Central Government.
However, the cost of providing roading and water, which accounts for a large portion of council’s expenditure, has risen significantly. Even though we have delivered major water upgrades like the Fairlie water treatment plant and the upgrade of the Twizel ring main, recent government legislation and water reform means that councils are legally required to meet new standards, and the historical approach is no longer sustainable. Further significant change is coming in this space, and we will be consulting with residents and ratepayers in the coming weeks to gather views on a model for water delivery that will meet the needs of the community and comply with new government legislation.
The overall average rate increases currently being considered of 12.06% is largely driven by the increases in the cost of providing roading and water infrastructure.
Council is required to formally adopt the Annual Plan before the end of June 2025 so rates can be set for the upcoming financial year.