Western Bay of Plenty Mayor James Denyer- April: We haven’t made this decision lightly

James Denyer invites residents in the Katikati area to have their say on the district's annual plan. Photo / Supplied

OPINION

Things are tough for everyone right now.

It’s hard to make ends meet with inflation levels just below a three-decade high, a cost of living crisis and soaring costs for materials and supplies.

Plus, a couple of recent severe weather events, including a cyclone that’s caused devastation in Hawke’s Bay and Tairāwhiti, in particular. Although we got off lightly in comparison, some of our infrastructure still suffered significant damage.

It’s the need to balance these tough economic times with the increasing costs faced by council that have played a key role in how we arrived at our draft Annual Plan for 2023/24.

This coming financial year, we’re proposing a rate increase of 7.41 per cent.

While this proposed rate increase is higher than we had anticipated, when the Long Term Plan was adopted two years ago, increased inflation has far exceeded what anyone assumed back then.

I can assure you we haven’t made this decision lightly, given today’s economic climate.

This is about prudent financial management and not creating a funding problem in the future. Doing what we can today, making calculated decisions to minimise the chance of larger rates increases in subsequent years.

We want to be a council that makes the right decisions and is committed to taking this district forward, while balancing the needs of its people. Not one that kicks the can down the road for a later date.

This means delivering on some projects that will not only keep our district moving smoothly, but also increase pride of place.

The community have communicated a clear desire for these projects through past kōrero.

We’re proposing to do them now, as they won’t have an impact on the average rates increase due to how they are funded. However, they will have a longer-term impact if we don’t do them now.

We also need to factor in the damage the recent adverse weather events caused. We are still assessing how much it will cost to fix - in the realm of $15-20 million - but it is likely to have an impact on this Annual Plan, and we may need to look at ways to help offset any rates impact.

So, back to the proposed rates increase.

We’ve done as much as we can to bring this rate increase in line with inflation.

With the Consumer Price Index at 7.2 per cent, and Local Government Cost Index increases ranging between 8.7 percent and 12.4 per cent, this hasn’t been easy. In addition, contractual cost increases are as high as 20 per cent to reflect labour and material price increases.

Simply, the Local Government Cost Index measures the changing price of materials and services for local government activity - in other words, it’s our own basket of goods for things like pipes and bitumen.

In particular, we are proposing to dip into our General Rate Reserve, as one mechanism to keep rates as low as prudently possible.

Using $1.6m of this reserve would allow us to strike an average 7.41 per cent rate increase. We will not be using the full $5.1m to allow us a buffer, should these funds be needed in the future. And because it is not smart to use such reserves to offset ongoing costs, rather than selected one-off capital costs.

For context, without using a portion of the General Rates Reserve, the average rate increase would be 9.07 per cent.

As I said earlier, we haven’t made this decision lightly. So, if you want to know more or wish to kōrero (speak) with me, councillors and the council team, then please join us for a coffee at one of our three drop-in sessions across the district in the week of April 17.

Alternatively, head online to www.haveyoursay.westernbay.govt.nz/annualplan before April 30.

I look forward to hearing from you about our Annual Plan.

James Denyer

Western Bay of Plenty Mayor