The proposed rates increase is partially based on the rising cost for public transport services. Photo / Supplied
The proposed rates increase is partially based on the rising cost for public transport services. Photo / Supplied
Northland ratepayers might have to dig deeper into their pockets than initially signalled, as rising costs hit Northland Regional Council service operations and expenditure plans.
In its draft for the Annual Plan 2022/23, the regional council is proposing a 13.89 per cent rate increase for the entire region – that's up from 13.79 per cent indicated in the Long Term Plan (LTP).
Public consultations on the plan kicked off on Saturday and will run until Friday, April 29.
For Kaipara and Far North ratepayers, the 2022/23 annual average increase remains at $48 per rating unit, while Whangārei's will be slightly higher at $65.
A new council boat and rising costs for public transport substantiate the proposal, according to the regional council.
NRC chairwoman Penny Smart says while the purchase of a new maritime vessel to replace the council's almost 20-year-old boat the Waikare was approved via the last LTP, the original estimate won't be sufficient because design and build costs have more than doubled since then.
Instead of $1.7 million, the new boat would now cost $3.3m.
"This increase is largely due to the Covid-19 pandemic and its influence on costs and supply chains," Smart said.
"It has affected the cost of materials (particularly aluminium), the price of transporting materials to New Zealand, and labour costs."
The council says the boat was a key piece of council infrastructure and not replacing it was not a realistic option given the work it carries out.
The Waikare is used to maintain beacons and buoys around Northland's coast; it assists with oil spills; pilots cruise ships; and carries out other maritime work including recovering stranded vehicles.
The council had looked at the possibility of building a fully electric vessel, but that had been ruled out as it would not have the range to travel up and down Northland's extensive coastline.
NRC chairwoman Penny Smart says the pandemic also plays a part in the proposed rates increase. Photo / Supplied
Under the Annual Plan, the council plans to borrow the funds in 2022/23 and repay them over 15 years.
"We're planning to increase rates from the 2023/24 year to cover this repayment, and also to cover depreciation on the new boat so we can pay for a new vessel when the time comes," Smart said.
"While this won't impact rates for this next annual plan, it will mean an increase of around $0.80 per rating unit starting in the 2023/24 year."
Running costs for public transport and an extension of the bus services, particularly Whangārei CityLink, also impact the regional rates.
While rising diesel prices and wage increases fuelled the cost of transport services by an additional 10 per cent in the last year, the pandemic has deterred passengers from using buses, meaning there is less income from fares.
Additional costs come from a separate school bus service which was introduced to address antisocial behaviour at the Rose St bus terminal.
The $188,000 of operational expenditure required will be funded from the targeted Whangārei transport fee of $4.80 a year, which is why Whangārei residents see a steeper increase in their rates compared to Kaipara and the Far North.
Central government recently announced half-price public transport fares, however, this will not impact the cost of running the buses and is only for three months, ending before the beginning of this plan.
