Long Term Plan 2024-2034 Consultation Outcomes
Council consulted on our ten-year Long Term Plan 2024-2034 between 11 April and 12 May 2024 where we proposed a number of financial changes. Key dates for Council’s decision process were:
- Submitters who wanted to speak in support of their submission had the opportunity to do so at Hearings in Ohakune on 21 May and in Taumarunui on 22 May.
- Council considered all feedback at a special Deliberation session on 29 May.
- Council’s decisions were formalised at the Council meeting on 26 June, where the 2024-2034 Long Term Plan and associated policies were adopted.
The following is a summary of Council's decisions on the issues proposed in the Long Term Plan consultation including the reasoning behind each decision.
Proposal to adjust the the targeted rate differential for exotic forestry.
Decision
The Council decided to incrementally increase the differential rating factor from 300% to a maximum of 700% of the Land Transport Targeted Rate over the first 4 years of the Long Term Plan.
Reasoning
The increase in the Land Transport Targeted Rate differential rating factor for exotic forestry is a necessary measure to address the disproportionate wear and tear on local roads caused by forestry trucks.
Although sheep and beef farming covers approximately 20 times the land area compared to forestry it generates less freight on average per year.
Among all land use types, exotic forestry is by far the biggest generator of freight and proportionally causes much more road damage to the rural network.
The forestry activity can also cause significant damage to the network through slash mobilised in heavy rains such as occurred on Pipiriki-Raetihi Road in 2015, and as has been seen in other parts of the country.
Many local roads were not designed with the modern demands of forestry in mind and are ill-equipped to handle the heavy and consistent traffic brought by forestry operations.
This mismatch between road capacity and usage has led to accelerated deterioration, necessitating significant maintenance and rehabilitation efforts, which are currently borne disproportionately by the wider community.
Increasing the Land Transport Targeted Rate differential rating factor for exotic forestry aims to rectify this imbalance, ensuring that those who contribute most to road wear and tear also bear a fair share of the maintenance costs.
This approach is not only equitable but also necessary to sustain our road network for future use. By adjusting the rates to more accurately reflect the impact of different industries on our roads, we can ensure a fairer distribution of costs and promote the long-term viability of our local infrastructure.
Impact on rates: | 100% increase per year, for the first four years of the Long Term Plan, on the Land Transport rating line for Exotic Forestry properties. |
Impact on debt: | None. |
Impact on levels of service: | Increased funding available for local road network. |
Proposal to introduce the Environmental Resilience Targeted Rates from 2025/26
Decision
The Council decided to implement the Environmental Resilience Targeted Rate from the 2025/26 rating year.
Reasoning
The increasing effects of climate change has brought an increased focus from government with new legislative requirements impacting on councils.
Council will start levying the Environmental Resilience Targeted Rate that was consulted on in the previous 2021/31 Long Term Plan from the 2025/26 rating year to fund our work to meet these legislative requirements.
For small councils like ours it can be extremely difficult to keep up with the evolving legislation and shifting responsibilities. Enacting the Environmental Resilience Targeted Rate will enable us to properly resource the work we need to do in this area.
While this rate will fund Council to meet our legislative requirements it should be seen as an investment in the environmental sustainability and prosperity of the district.
With our economy and way of life deeply intertwined with the environment it is a proactive step towards safeguarding the future of our rural communities. The funded work will produce data invaluable for climate change adaption and civil defence planning contributing to our aim of building resilient, sustainable communities.
The work will benefit all ratepayers and will be charged in a transparent way via a separate line on the rates invoice.
Impact on rates: | $21.22 inc. gst per rating unit per financial (rating) year. |
Impact on debt: | None. |
Impact on levels of service: | Increase for all ratepayers. |
Proposal to introduce a remission for a second SUIP (separately used or inhabited part of a rating unit) to reduce fixed charges UAC (uniform annual charges)
Decision
The Council decided to introduce a remission for a second SUIP, aimed at lowering fixed (UAC) rating charges for qualifying ratepayers.
Reasoning
The driver for this change was to provide a remission for ratepayers who may have a second SUIP for whanau for which they do not receive income or other financial benefit. Council did not want ratepayers in this situation to pay a second UAC on their SUIP.
Properties with a second SUIP need to meet the following criteria to qualify for this remission:
1. The rating unit is owned by the ratepayer and is the ratepayer’s principal place of residence; and,
- The relevant SUIP within that rating unit is recognised in the District Valuation Roll as a studio, sleepout, flat or dwelling; and
- The relevant SUIP within that rating unit is not advertised for short-term accommodation, not rented or sublet, nor tenanted as part of an employment or remuneration package; and
- The relevant SUIP within the rating unit is either not occupied or is occupied as an extension of the main household, and
- The property has no outstanding rate arrears.
2. If a rating unit contains more than two habitable units that would qualify for a remission under this policy, only one unit is entitled to remission.
3. The ratepayer has applied for a rate remission on the prescribed form by 31 May each year.
4. Remissions must be applied for annually and cannot be backdated to previous rating years.
Impact on rates: | The financial impact is estimated* to be up to $150,000 per annum that is equivalent to 0.5% in rates. (*The final value of the rate shift will depend on the number and value of remissions) |
Impact on debt: | None. |
Impact on levels of service: | None. |
Proposal to extend Council’s Rates Remission Policy in cases of severe financial difficulties.
Decision
The Council decided to extend its Rates Remission Policy to support ratepayers facing severe financial difficulties.
Reasoning
Extending the Rates Remission Policy as proposed will provide more flexibility for Council to support ratepayers in extreme financial hardship should they meet the criteria.
This change to the Rates Remission Policy recognises that not all situations in which it may be appropriate for the Council to remit rates will necessarily be known in advance and/or provided for in specific rating policies.
In circumstances where the rating policy is deemed by the Council to unfairly disadvantage an individual ratepayer, the Council may grant a one-off remission of part or all of the assessed rate on condition that the remission does not set a precedent that unfairly disadvantages other ratepayers.
The proposed change will provide clarity in situations were ratepayers may be eligible for relief under current policy (Remission for Extreme Financial Hardship Policy Statement 2.2.4(f)).
Extending the Rates Remission Policy will not adversely affect other ratepayers.
Any application for remission will be considered by the Rating Sub Committee in line with Council’s Delegations Policy.
Impact on rates: | None. |
Impact on debt: | None. |
Impact on levels of service: | None. |
Proposal to remove 3% early payment discount.
Decision
The Council decided to remove the 3% early rate payment discount.
Reasoning
Council had been offering a 3% early rate payment discount to ratepayers who pay their annual rate bill in one lump sum at the beginning of the rating year through its policy on discounts for early payment of rates.
The early rate payment discount was provided on the premise that Council would receive a larger payment of rate revenue at the beginning of the rating year that we would then be able to invest for a higher return and net benefit to Council.
Recent financial analysis of this premise however has identified that there is no financial benefit to Council, and the discount is in fact costing Council around $90,000 per annum in net lost revenue.
This additional rates revenue could be used to reduce Council debt by $1.0m (inflation adjusted) over the ten years of the Long Term Plan.
Removal of the discount is seen as fairer to all ratepayers as ratepayers who did not, or could not, afford to pay their rates in a lump sum at the beginning of the rating year have been effectively subsidising those who can. As such, Council has removed the 3% early rate payment discount via the dissolution of the associated policy.
Impact on rates: | None. |
Impact on debt: | Potential reduction in Council debt by $1.0m over the ten years of the Long Term Plan. |
Impact on levels of service: | None. |
Proposal to enhance rates remission support for owners of Māori land:
Decision
The Council decided to proceed with enhancing rates remission support for owners of Māori land, incorporating all proposed remission extensions into the new policy.
Reasoning
The changes to the policy will:
- Ensure it is up to date and compliant with the legislation for rating of Māori Freehold Land and the principles of Te Ture Whenua Māori Act 1993.
- Consider applications for remissions on certain types of Māori land that is not in Māori freehold title.
- Offer wider rate remission support to owners of Māori land to look after their whenua for current and future generations.
- Better aligns with Council’s strategic priorities of improving outcomes for Māori and the objectives of our Wellbeing Framework.
- The enhancement of rates remission support for owners of Māori land will shift the rate requirement to other ratepayers.
Impact on rates: | The value of the rate shift will depend on the number and value of the remissions. |
Impact on debt: | None. |
Impact on levels of service: | None. |
Proposal to adjust Council’s Financial Strategy and increase the self-imposed rate increase limit from the Local Government Cost Index (LGCI) +2% to +3%.
Decision
The Council decided to raise the self-imposed rate increase limit from Local Government Cost Index (LGCI) +2% to +3%.
Reasoning
As part of our desire to limit the rate burden Council has been working to a ‘self-imposed’ rate revenue increase limit of the Local Government Cost Index (LGCI) + 2%. The objective of having a ‘self-imposed’ rate increase limit is to achieve a sustainable balance between rates affordability and the delivery of services that meets community expectations.
For this Long Term Plan we proposed lifting our self-imposed rate increase limit from the Local Government Cost Index (LGCI) + 2% to LGCI + 3%. Following the first three-year lifts of 9% per annum, this would result in projected annual rate increases of around 5% per annum from 2027/28 for the remaining seven years of the Long Term Plan.
The additional revenue from lifting our income threshold by 1% will allow us to maintain levels of service, remain within our self-imposed debt affordability benchmark of 2x rates income for all but the first year of the Long Term Plan (2024/25), as well as starting the gradual repayment of debt later in the Long Term Plan.
It will also ensure that we have a balanced budget for all ten-years of the Long Term Plan and are not raising debt to cover our operating costs.
Impact on rates: | Will increase rates revenue. |
Impact on debt: | Will have repaid an additional $13.7m in debt by the end of the Long Term Plan period in 2033/34. |
Impact on levels of service: | Will enable Council to maintain Levels of Service. |
Proposal to increase Council’s fees and charges.
Decision
The Council decided to proceed with the proposed adjustments to fees and charges, making minor administrative changes.
Reasoning
For this Long Term Plan we have introduced some new fees and charges along with increases to existing fees and charges.
The new fees and charges includes brand new charges for new services as well as the combination of previous fees and charges to simplify pricing. Any increases to fees and charges reflect the increased cost of providing these services.
Council believes that the user-pays principle promotes fairness, as individuals or businesses that use more of a service bear more of the cost, rather than spreading it across other ratepayers regardless of their usage levels.
In setting new charges or increases we have been mindful of the cost of living pressures on our communities. While we work to keep fees and charges as low as possible we need to recover the cost of the service.
If we were not to pass on the higher costs we would need to recover them from the general ratepayer rather than the specific user.
Many increases in fees and charges are tied to contractor costs which are linked to an inflation index relevant to that industry. As Council’s contracts for these services adjust automatically in response to these industry specific inflation pressures we have no option but to recover them through higher charges to the service user.
For the up-coming 2024/25 rating year we are budgeting to receive 7% of our required income worth $3.8m from fees and charges.
To see individual increases see Council's Fees and Charges Manual 2024/25 on activity webpage.
Impact on rates: | None. |
Impact on debt: | None. |
Impact on levels of service: | Will enable Council to maintain Levels of Service. |