Covid 19 coronavirus: Whangārei District Council to consider slashing impending rates rise

Whangārei District councillors will this week discuss reducing the impending 5.2 per cent rates rise. Photo / File

Whangārei ratepayers could get some much-needed relief this week with the council looking to pull back the size of a scheduled 5.2 per cent rates rise in the face of the Covid-19 recession.

The Whangārei District Council could more than halve its rates rise for the year from July 1, 2020, to 2.2 per cent, to be in line with Local Government Cost Index indexed inflation.

During the Covid-19 lockdown a staff and councillor review has examined the best way forward amidst a grim outlook - at least in the short to medium term - for the district and its 90,000-plus residents and ratepayers.

"That was then, this is now, where do we go from here?" Whangārei mayor Sheryl Mai said of the review approach.

The council is slashing $5.7 million from its operating costs - $2m from staffing costs, $2.7m from its contractors and consultants budget and $1m from other areas including fuel, stationery, uniforms, market research and travel.

Councillors will meet on Thursday in an online full council meeting.

They are expected to vote in favour of an agenda item from Dominic Kula, general manager strategy and governance, and Alan Adcock, general manager corporate/chief financial officer, which recommends the pared-back 2.2 per cent rates rise.

"Covid-19 has had dramatic and wide-ranging impacts on the global economy. In New Zealand, despite our relatively successful national response to the virus and its containment, the effects on our national and local economy will be profound. The epidemic is expected to continue to place unprecedented pressure on communities" Kula and Adcock said in the agenda item.

Chief executive Rob Forlong said councillors will be deciding at the meeting which option they believe works best for the district.

Forlong warned any rates reduction now would require a catch-up period of extra rating later, the size of which directly related to how much rates were cut in the short term.

The extra rates sought later in the wake of cuts now would come at the same time as likely central government tax increases to fund its Covid-19 relief programme, he said.

Cutting the rates rise to 2.2 per cent is one of four options thrashed out during councillor workshops. The others are to stick with the 5.2 per cent rise; a 3.2 per cent rise or a no increase.

• Covid19.govt.nz: The Government's official Covid-19 advisory website

Forlong said rates movements up or down brought obvious impacts for the community, which were in direct correlation with how much rates moved from original forecasts.
The zero increase option would mean significant, noticeable effects on council services for the district.

"That option would definitely impact on our service levels. People in the community would see a marked change. Things our community wants done would stop getting done," Forlong said.

In contrast, the preferred 2.2 per cent option would bring only slight service changes for the public.

Forlong said reassessment of how to proceed into the new financial year had clearly been needed in the wake of Covid-19.

One aspect considered during the rates review was looking at whether commercial, residential and rural sectors of the district's ratepaying community were each paying the appropriate share of total rates.

Consultation is expected to follow Thursday's meeting, subject to councillors deciding on the 2.2 per cent increase.

Consultation won't be done if the 5.2 per cent or 3.2 per cent options are decided on – due to being within the parameters of what had already been put in place based for the 2020/2021 annual plan.

Consultation would, however, also take place if councillors went for the no rise due to its major downward variation from original forecasts.

A pared-back two-week targeted consultation would take into account doing so safely during the Covid-19 pandemic.