Regional rates could rise 6pc

Hawke's Bay Tourism asked the regional council for a funding boost to encourage more people to visit ... and spend while they are here.

Hawke's Bay Regional Council's total rates take will increase by almost 6 per cent over the coming year under a proposal to be voted on by councillors this week.

The council meets on Wednesday to finalise its long-term plan - the organisation's 10-year budget and work plan, which is updated every three years.

If the draft proposal is adopted without change, the council's total rates take will increase by 5.87 per cent in the new financial year, beginning on July 1.

Rates will increase by a further 5.69 per cent in the 2016-17 year and by 5.51 per cent in 2017-18.

Individual changes to the rates bills land owners across the region receive from the council will vary, depending on property size and location.

One of the major changes to the updated long-term plan is a boost in tourism funding.

The council is a major contributor to regional marketing organisation Hawke's Bay Tourism, which asked it to boost its annual funding from $850,000 to $1.75 million.

Hawke's Bay Tourism said the extra money would enable it to fund a marketing drive that would double domestic and international visitor spend in the region, currently estimated at $550 million a year.

The boost has been incorporated into the draft long-term plan - but in stages over the next three years.

The organisation would receive an extra $300,000 in the 2015-16 financial year, $600,000 in 2016-17 and the full $900,000 it was asking for in 2017-18 and beyond.

A report by council staff prepared for Wednesday's meeting said financial adjustments in the revised long-term plan included allowances for "external market factors" that were beyond the council's control.

These included a delay in reaching a final decision point for the Ruataniwha dam project, due to protracted legal proceedings which had meant more funds than previously anticipated had been drawn down to cover the project's development.

A reduction in bank interests rates also meant the council's income from the funds it had in term deposits was below that previously forecast.

However, those "unfavourable financial pressures" had been partly offset by lower insurance premiums and the use of the council's "Dividend Equalisation Reserve" to offset a reduction in dividend payments.