Hastings District Council sets “realistic” savings target of 2.5 percent for first year of Long Term Plan
The Hastings District Council has set a “realistic” savings target of 2.5 percent for the first year of its Long Term Plan.
In an agenda for a full Council meeting on Thursday, an average rate rise of 25 per cent for 2024/25 has been proposed as part of its Long Term Plan.
The Hastings District Council will decide whether or not to put out for public consultation a proposed rates rise of 25 percent for the next year followed by 15 percent rate increase the year after and a 10 percent increase in year three.
Local authorities around the country are facing increasing financial pressure. Recently the Napier City Council agreed to consult with the public about a proposed 23.7 percent increase for 2024/45, while the Central Hawke’s Bay District Council (CHBDC) has suggested 20 percent and the Hawke’s Bay Regional Council 19.6 percent.
Hastings District Council has debt of $400m, which sees the local authority paying $16m in interest per year alone. Added to that are the Council's growing Cyclone Gabrielle recovery costs, which include bridge, road and other infrastructure rebuilds, as well as category three buyout payments.
The agenda document 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.
Hawke’s Bay App put a number of questions to the Hastings District Council today regarding the Long Term plan details.
Asked why the Council had not released any supporting consultation documents with the agenda yesterday, a Council spokesperson said that the draft consultation document “is still being completed and will be available on the website tomorrow (with the agenda paper)”.
The spokesperson said that the 2.5 per cent figure “is a savings target that’s considered realistic (as a Phase One initiative) and Council will report during the 2024/25 financial year on progress towards achieving this and where savings have been found”.
Hawke’s Bay App reported recently that the Hastings District Council has a staff salary bill of just under $40m per annum. (https://cdn.hbapp.co.nz/news/news/video-hastings-district-council-salary-costs-are-just-under-40m-with-110-staff-earning-more-than-100000-per-year)
Asked if the Council was looking at any more potential savings in its staff remuneration spend, the spokesperson said that the Council is working on a Phase Two set of measures to be developed by December 2024.
In the document released yesterday the Council indicated that the proposed rate increase from year four decreased significantly. The spokesperson said that in terms of rate increases In Rating Area One, it’s proposed they return to 4% from years 4-10 and in Rating Area Two they return to 7% in Years 4-10 (to fund escalated road renewals, which the community was consulted on in the 2021 LTP.)
The Council said that it is committed to identifying a potential Phase-Two suite of further savings by December, but the spokesperson said that there is currently no indication of what that monetary figure might be.
The Council spokesperson said that after Cyclone Gabrielle, central government gave councils severely affected by the cyclone a dispensation to prepare an unaudited three-year plan.
“This recognised the impact the cyclone had on our resources, timings and ability to deliver previously planned projects. Despite this change Council has prepared a plan to auditable standards.”
