4 Keeping Rates Down
How Much We Are Proposing to Rate
Rates are one of the most important sources Council uses to fund the cost of its services. We expect 57% of Council’s overall costs will be funded by rates during the 2021/31 period. We have unavoidable cost drivers particularly for water, sewerage and stormwater, that will affect ratepayers who receive these services. But we’re proposing to keep our overall rates down in a number of different ways.
This strategy is planning to:
- Use debt and borrowing to our advantage to get lower interest rates for our asset build programme (find out more in Our Finances on page 10).
- Subsidise rates using income from investment returns.
- Use roading reserve fund (worth around $1.7M) to reduce rates below 4% in 2023 and 2024. Find our more about this in Options 1 and 2 below.
Option 1: Use reserve funds to keep rates down in the short term
This is Council's preferred option.
We would like to free-up money in the short-term so that we can keep the overall yearly rates increases under 4% for our ratepayers during 2021/22 to 2023/24. In the past Council has put funding aside for roading and we have accumulated a reserve fund for this service.
We are proposing to use this fund to help reduce rates overall. To balance the risk of this approach we will cover any emergency situations that might arise using other funding Council has access to.
This would improve the mix from an overall rates perspective in the short-term through to 2024, but not in the longer term from 2025 and beyond. This would impact roading rates, particularly for those in the rural area who pay a bigger proportion of this type of rate. But it wouldn’t avoid imminent water, sewerage and stormwater rates for ratepayers who receive increases in these services.
The approach of keeping rates down using this funding in the shorter term means they will go up when it stops.
Option 2: Don’t use reserve funds to keep rates down in the short term
Not use the measures described in Option 1 to achieve the goal of an overall increase of less than 4%. The overall rates increases are outlined in the graph below.
Keeping Rates Down from the Consultation document (this includes our Rates Examples). PDF 530KB