• Video: Napier City Council proposes 23.7 per cent rates increase

Video: Napier City Council proposes 23.7 per cent rates increase

Napier ratepayers are facing a proposed rates increase of 23.7 per cent – the highest ever in the Council’s history.

At a Council meeting today, the Council voted unanimously to put the proposed increase of 23.7 percent out for consultation and invited the community to provide feedback. The move was proposed by Mayor Kirsten Wise and seconded by councillor Keith Price.

The historic proposed rates increase come as the Council’s external debt is expected to increase from the $10 million now to $500m by 2034. The extent of the financial pressure facing the Council is contained in in supporting documents for the Three-Year Plan 2024-27 consultation proposal.

 “While developing this strategy, we’ve had to be honest with ourselves about the state of the infrastructure networks we manage.”

“A significant proportion of our asset portfolio is ageing, which is common after development ‘booms’ in the 1950s and 1970s. It gets to a point where lots of assets come to the end of their useful lives after 50 to 80 years – a concrete pipe, for example, is only engineered to last for a finite period,” the document said.

“We also haven’t invested the way we needed to in maintenance and proactive replacement. While that saved our ratepayers money in the short term, it means we’re starting to see assets failing and requiring costly emergency fixes and increased renewal programmes.”

At today’s meeting, Wise thanked council staff for the work they had done to bring down the proposed increase from the initial draft of 43 per cent to 23.7 per cent.

Speaking before the vote to consult, Wise said she knew that there would be many in the community who would be surprised and not happy with the proposed rates increase.

“We encourage everybody to provide their feedback. But just to give some context to that figure, and I have been speaking about this quite publicly for quite some time, because I do think it's really important for our community to understand the position that we as a council, and in fact councils throughout the whole country, find ourselves in with the ever-increasing pressures that we have on our financial position.”

She said the Council was also having to cope with the additional impact of Cyclone Gabrielle and the ongoing recovery to that.

“All councils are dealing with the new government and the ongoing uncertainty around all manner of reforms which are still in play and not knowing quite how they might impact on our future financial sustainability.”

“And I guess just to touch on a few areas of where costs have grown exponentially in recent years, as the deputy mayor discussed earlier, bridges have increased by 38%.,Roads and water supply systems are 27% more expensive to build than they were three years ago. Sewage systems are 30% more expensive to build than they were three years ago. And these are all parts of our core infrastructure that we are responsible for providing to our community.”

Wise said that the Council faced the same cost pressures that every household and every business faces.”

“We have the inflationary pressures. Insurance, which I know everybody is struggling with. My own personal insurances went up by 35% in the last 12 months. Rising wage costs are something that are a significant part of our proposed increase this year. And we haven't actually introduced any new activities or increased any levels of service except for a 2% resilience fund. And after what we have been through in the last 12 months, I think it's incredibly important that we do continue to invest and have funds available to build resilience and to prepare ourselves for any future events that may hit our community in the foreseeable future. So I'm very much looking forward to taking this consultation document out to our community, receiving submissions.”

Before the vote, Councillor Maxine Boag said that while she supported the resolution, she was “very reluctant to support such a huge rates increase because I'm particularly concerned about people struggling with the cost of living crisis and the possible implication it has for renters when the landlords are paying a significant larger amount of rates”.

“I do appreciate the fact that our rates have traditionally been lower than many other cities, and now I guess this is catch-up time. And I suppose we are paying for underspending in some of our assets over the years. And I would suggest to the public that if they've got suggestions on how we could reduce that amount, then I recommend they submit them to us and come and speak to us about them.”

In response to Boag’s comments, Price said: Keith Price: “I just want to clarify the point to Councillor Boag that this is a consultation document, so we're laying our cards on the table for the public to come back to us with any concerns.”