The Whakatāne District Council’s draft budget for the 2017/18 financial year will require an estimated average rates increase of 2.94 percent across the District.
Reporting to the Council last week, Finance General Manager Helen Barnes said all budget parameters were well within the indicative figures which had been set out for the 2017/18 year in the 2015-25 Long Term Plan (LTP).
“The financial strategy which guides the LTP had two primary focuses: reducing external debt owed to banks and keeping rates increases to a reasonable level,” Ms Barnes said. “Rates affordability, sustainability, responsibility and identifying and taking opportunities to grow the vibrancy and prosperity of the District were the LTP’s key underlying principles, and with those factors in mind, our financial forecasts have focused on minimising both the 2017/18 rate increase and borrowing.”
The forecast 2.94 percent average rates increase for 2017/18 is well below the indicative LTP increase for the year of 3.55 percent, while rates revenue as a proportion of operating revenue, indicative interest rates, interest as a proportion of rates revenue, and total debt are all well below the respective LTP limits.
Mayor Tony Bonne said rates modelling based on the financial forecasts illustrated the impact last year’s QV district revaluation would have on actual rates costs for some ratepayers.
“While the average value of all properties increased by 14.7 percent between 2013 and 2016, in some areas and sectors the average increase was much higher, which will have an effect on the portion of rates which is calculated on capital values,” he explained. “In Edgecumbe, for example, the capital value of the average property increased by 44 percent, which will result in a rates increase of 5.31 percent ($146 including GST). If that calculation had been made based on the 2013 capital value, the property would have seen a rates decrease of 0.3 percent.”
Other areas which will also see significant rates impacts as a result of above average property capital value increases include Matatā, Ōhope and high-value rural properties. Capital values for the average high value rural property increased by 35 percent (from $2.37 million to $3.19 million) in the 2016 district revaluation, which would result in a rates increase of more than 18 percent, compared to just over 5 percent if rates had been calculated on the 2013 valuation.