The Whakatāne District Council last week confirmed two of the significant building blocks for its 2018-28 Long Term Plan (LTP), with the adoption of its Financial Strategy limits and Draft Revenue and Financing Policy for consultation.
The 2018-28 Financial Strategy sets out the principles and outcomes intended for the LTP and determines how the Council manages its finances. It retains the overarching principles from the previous LTP – affordable, sustainable, responsible and enabling – with the key objectives being to:
- Ensure resource is available to sustainably manage assets and services
- Retain capacity to add value to services and facilities
- Maintain rates at an affordable level
- Maintain overall debt at around the current level
- Manage finances responsibly and minimising financial risk
The strategy increases the current debt limit from $75 million to $80 million, acknowledging the significant capital expenditure that will be required to renew and upgrade infrastructure in future years, particularly water, wastewater and stormwater assets. Servicing an additional $5 million of borrowing would cost approximately $600,000 a year, or around $39 per average ratepayer.
Annual rates increases would remain capped at the Local Government Cost Index (LGCI - a measure of cost increases across all local government activities), plus two percent. That would limit average rates rises during the LTP period to between 4.0 and 4.7 percent. Predicted average rates increases between 2018/19 and 2027/28 are typically much less than the proposed limits, as shown in the table below.
Year | LGCI + 2% | Predicted Average Rate Increase |
|---|---|---|
2018/19 | 4.00% | 3.93% |
2019/20 | 4.20% | 3.12% |
2020/21 | 4.20% | 2.36% |
2021/22 | 4.20% | 2.24% |
2022/23 | 4.30% | 2.36% |
2023/24 | 4.30% | 2.15% |
2024/25 | 4.40% | 3.76% |
2025/26 | 4.50% | 3.76% |
2026/27 | 4.60% | 0.45% |
2027/28 | 4.70% | 1.92% |
Also retained from the last LTP is an 80 percent limit on rates revenue as a proportion of total operating revenue.
Meanwhile, the Draft Revenue and Financing Policy includes several minor changes in the way activities are funded. These involve changes to the public/private split (rates funded and user-funded respectively) for the Council’s library; ports and harbour and resource management activities; plus the removal of the pensioner housing activity and inclusion of the Whakatāne Holiday Park (100 percent private-funded).
Community consultation on all of the key changes will be undertaken in March/April 2018, as part of the LTP process.