Rates 2020/21

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Ngā reiti 2020/21

We set our rates based on community needs, the demand for Council services, level of service delivery required and the overall rates affordability.

This year we are considering two options for a rates increase. The preferred option is an increase after growth of 5.1%. This is below the 7.1% forecast in the 2018-28 Long-term Plan and the proposed 9.2% rates increase signaled earlier this year.

Our preferred rates increase option is outlined below. You can more information about all of the rates increase options here.

Rates Option A – 5.1% increase (preferred option)

Our preferred option maintains current service levels, while also including extra debt funding of $48m. This is equivalent to an extra 15% of potential rates transferred to debt. It still includes Council making organisational savings and carrying extra financial risk. This is made up of:

  • the one-off impact of $24m lost fees and charges revenue in 2020/21
  • $14m expected revenue loss from the Wellington Airport dividend
  • $10m of funding adjustments to spread costs over the period of benefit

It is considered the most financially prudent and transparent of the two options. Option A is Council’s preferred option.

The other option - Option B - is for a 2.3% rates increase and includes $11m more borrowing.It is not Council's preferred option because it puts too much pressure on future ratepayers to repay the debt and accumulated interest.

Proposed 2020/21 Annual Plan rates options comparedOption AOption B

Rates increase 2020/21

5.1%

2.3%

Rates increase in 2021/22

10%

14%

No increase in fees in 2020/21

No reduction in service levels

Debt funds revenue shortfall, reducing the impact on ratepayers in 2020/21

Additional debt funding is ‘one-off’ so minimal impact on future years

X

Likely to meet financial prudence test

X

Meets balanced budget requirement

X

X

Recommended

X


To find your property and rates information visit our property search.


Ngā reiti 2020/21

We set our rates based on community needs, the demand for Council services, level of service delivery required and the overall rates affordability.

This year we are considering two options for a rates increase. The preferred option is an increase after growth of 5.1%. This is below the 7.1% forecast in the 2018-28 Long-term Plan and the proposed 9.2% rates increase signaled earlier this year.

Our preferred rates increase option is outlined below. You can more information about all of the rates increase options here.

Rates Option A – 5.1% increase (preferred option)

Our preferred option maintains current service levels, while also including extra debt funding of $48m. This is equivalent to an extra 15% of potential rates transferred to debt. It still includes Council making organisational savings and carrying extra financial risk. This is made up of:

  • the one-off impact of $24m lost fees and charges revenue in 2020/21
  • $14m expected revenue loss from the Wellington Airport dividend
  • $10m of funding adjustments to spread costs over the period of benefit

It is considered the most financially prudent and transparent of the two options. Option A is Council’s preferred option.

The other option - Option B - is for a 2.3% rates increase and includes $11m more borrowing.It is not Council's preferred option because it puts too much pressure on future ratepayers to repay the debt and accumulated interest.

Proposed 2020/21 Annual Plan rates options comparedOption AOption B

Rates increase 2020/21

5.1%

2.3%

Rates increase in 2021/22

10%

14%

No increase in fees in 2020/21

No reduction in service levels

Debt funds revenue shortfall, reducing the impact on ratepayers in 2020/21

Additional debt funding is ‘one-off’ so minimal impact on future years

X

Likely to meet financial prudence test

X

Meets balanced budget requirement

X

X

Recommended

X


To find your property and rates information visit our property search.


  • What we are hearing

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    about 2 months ago

    See a snapshot of who’s been taking part in the consultation by viewing our interactive dashboard of participation.

    See a snapshot of who’s been taking part in the consultation by viewing our interactive dashboard of participation.

  • Rates options for 2020/21

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    2 months ago

    Below is the detailed information on our two rates options. Let us know which is your preferred via our Annual Plan survey.

    You can also find out more information about the impact these options will have on future rates increases here.

    Rates Option A – 5.1% increase (Council's preferred option)

    Our preferred option maintains current service levels, while also including extra debt funding of $48m. This is equivalent to an extra 15% of potential rates transferred to debt. It still includes Council making organisational savings and carrying extra financial risk. This is made up of:

    Below is the detailed information on our two rates options. Let us know which is your preferred via our Annual Plan survey.

    You can also find out more information about the impact these options will have on future rates increases here.

    Rates Option A – 5.1% increase (Council's preferred option)

    Our preferred option maintains current service levels, while also including extra debt funding of $48m. This is equivalent to an extra 15% of potential rates transferred to debt. It still includes Council making organisational savings and carrying extra financial risk. This is made up of:

    • the one-off impact of $24m lost fees and charges revenue in 2020/21
    • $14m expected revenue loss from the Wellington Airport dividend
    • $10m of funding adjustments to spread costs over the period of benefit

    This option provides a pragmatic balance between managing the pressures on current ratepayers and ensuring the Council remains financially sustainable in the future. The actions of today should not impact unfairly on ratepayers in the future.

    In debt funding the one-off shortfall in operating revenue anticipated in 2020/21 we are ensuring the borrowing proposed is for a specific purpose. While this does not meet the S100(i) balanced budget provision of the Local Government Act, it can be resolved that it is financially prudent due to the one-off nature, with revenues expected to recover in following years and repayment of the debt incurred in 2020/21 occurring over a 10-year period to avoid a significant single-year impact on future ratepayers.

    It is also considered the most financially prudent and transparent of the two options.

    Option A is Council’s preferred option.

    Rates Option B – 2.3% increase

    This option will deliver the same levels of service and will also debt fund the $48m as outlined in Option A. However, this option does not rates fund the additional depreciation costs incurred from the 2020 infrastructure revaluation. Instead, in 2020/21 this is funded from additional borrowing of $11m, meaning a total $59m in debt funded operating costs, which will then be repaid over the subsequent ten years.

    This achieves a rates increase of 2.3% in 2020/21. However, it also increases future rates funding to repay the debt and accumulated interest.

    This option is not recommended because it does not meet the balanced budget requirement as per the Council’s financially prudent Revenue and Financing Policy or in a manner that promotes the current and future interests of the community as required in the Local Government Act.

    Funding of depreciation is how we fund the replacement of infrastructural assets. Reducing depreciation funding at a time when we need to increase our funding of infrastructure is not recommended. As a one-off solution it will also result in a significantly higher rates increase in the 2021/22 year.

    This is not Council’s preferred option.


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  • What are rates for?

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    2 months ago

    In the same way our taxes contribute to the running of the country, rates are important to ensure Wellington continues to function.

    Some of the services and facilities that Wellingtonians receive through their rates include:

    • 81 million litres of drinkable water piped per day
    • 671 km of stormwater pipes maintained and upgraded
    • 700km of footpaths maintained and upgraded
    • 105 playgrounds maintained and upgraded
    • 270,675 calls answered by our Contact Centre staff
    • 1,048km of wastewater pipes maintained and upgraded
    • 800,000 resources in City Archives.
    • 95,000 native plants planted with the community
    • 650,000 items can be borrowed from our 13 libraries
    • 350km...

    In the same way our taxes contribute to the running of the country, rates are important to ensure Wellington continues to function.

    Some of the services and facilities that Wellingtonians receive through their rates include:

    • 81 million litres of drinkable water piped per day
    • 671 km of stormwater pipes maintained and upgraded
    • 700km of footpaths maintained and upgraded
    • 105 playgrounds maintained and upgraded
    • 270,675 calls answered by our Contact Centre staff
    • 1,048km of wastewater pipes maintained and upgraded
    • 800,000 resources in City Archives.
    • 95,000 native plants planted with the community
    • 650,000 items can be borrowed from our 13 libraries
    • 350km of walking and biking tracks maintained
    • 195.1 sqm of open space per Wellingtonian
    • 14,500 LED street lights operated

    How do rates work?

    Our rates revenue is split between targeted rates and general rates. The Council is planning to collect $342m (GST exclusive) of rates during 2020/21.

    General rates are paid by all ratepayers and applied to services which benefit the whole community, for example, maintaining parks and walkways, operating our libraries, and renewing our roads and footpaths.

    Targeted rates are paid by a specific group of ratepayers who receive a specific service – for example water, stormwater and wastewater services in rural areas, and business improvement districts (BIDs).

    Whether you rent, own a home or a business in Wellington you’ll be contributing to Council rates either directly or indirectly.

    Your money helps us deliver more than 400 day-to-day services and also pay for the borrowings used to fund big capital projects across Wellington.

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  • Rates before Covid-19 impact

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    2 months ago

    Rates are spent on the day-to-day services, facilities and the running of Council. Rates also need to cover inflation in costs and the depreciation of assets.

    Before Covid-19 hit New Zealand, there were already significant cost pressures on our core services and we were working on ways to reduce the impact of these on rates. The 2020/21 pre-Covid-19 budget and rates increase of 9.2% that was announced in March already assumed about $10m in budgeted risks and savings targets.

    To further mitigate the 9.2% rates increase, we made the decision to propose delaying rates-funding projects such as Let’s Get Wellington...

    Rates are spent on the day-to-day services, facilities and the running of Council. Rates also need to cover inflation in costs and the depreciation of assets.

    Before Covid-19 hit New Zealand, there were already significant cost pressures on our core services and we were working on ways to reduce the impact of these on rates. The 2020/21 pre-Covid-19 budget and rates increase of 9.2% that was announced in March already assumed about $10m in budgeted risks and savings targets.

    To further mitigate the 9.2% rates increase, we made the decision to propose delaying rates-funding projects such as Let’s Get Wellington Moving and Te Ngākau Civic Precinct master-planning for a further year. These projects will continue, but will be funded by borrowing in 2020/21. This brought the rates down to 7.1%, as proposed in the week before the lockdown was announced.

    Once the city went into lockdown, we had to consider how to manage the above cost pressures and risks, while also needing to mitigate the significant impact of forecast lost revenue and the reality that many in our city are now struggling. Consequently, we are proposing to debt fund this revenue loss (after reviewing costs) and are recommending rates Option A of 5.1%.

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