Cost of Cyclone Gabrielle to ratepayers set to be $250m plus interest
Hastings District Council ratepayers will bear the cost of a $250m Cyclone Gabrielle bill with part of a 25 percent average rates rise in the first year and 15 percent in the second year targeted for Cyclone costs.
In an agenda released today ahead of a Hastings District Council meeting on Thursday, it has been proposed that a rates rise of 25 percent followed by 15 percent rate increase the year after and a 10 percent increase in year three.
The agenda says that despite some funding from Central Government, the net cost to Hastings District ratepayers is unprecedented to the tune of $230m plus interest.
This is proposed to be funded over a 16-year term. The first year average rates rise of 25 percent is made up of a 17 percent base cost increase plus eight percent first step to fund Cyclone Gabrielle. The second year increase of 15 percent includes a 9 percent base cost increase and a six percent second step to fund Cyclone Gabrielle. The third year proposed increase of 10 percent does not include a Cyclone Gabrielle component.
The plan targets substantial completion of the roading recovery programme over the first six years of the plan and completion of the property buyout process.
The document says that in addition to the overall movements and new cyclone targeted rates the plan includes phased increases to a number of other targeted rates that are charged as a fixed amount over the next five years (such as drinking water and wastewater).”
“These increases will see some per property rates varying from the overall average.”
The Council’s debt to revenue ratio would increase and be held at 250% until the mid-term of the plan with a target to get back to the Council’s current policy setting of 175% by year 10 of the plan.
“The calculation of this ratio is to be based on Council business-as-usual revenue and excluding one off or non-recurring revenues. This manages the risk that the Council draws down on Local Government Funding Authority facilities based on one off revenues and finds in subsequent years that revenues drop thereby creating an inadvertent breach of covenants in subsequent years.”
The Council says that while some short-term borrowing is proposed for operations the Council will balance its budget by Year 2 of the plan.
