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.