Hawke’s Bay Regional Council cuts rates increase from 19.6% to 16%, tourism body keeps its funding

A council reversal means Hawke’s Bay Tourism will continue to be funded by the regional council. Photo / Paul Taylor

Hawke’s Bay Regional Council will continue funding Hawke’s Bay Tourism and Te Mata Park, and is reducing its proposed rates increase by making other cuts and dipping into investments.

The turnaround for Hawke’s Bay Tourism and Te Mata Park, which had each protested over their loss of funding, came when councillors reached a compromise after 11 hours of deliberations on the Three-Year Plan.

Eight hours on Tuesday and a further three hours on Thursday were spent deliberating Three Year Plan decisions, using the 882 written and verbal submissions and information provided by staff.

Regional council rates in the plan were initially proposed to increase on average by 19.6% in 2024 and 18.1% in 2025, before tapering off to 9% in 2026 - a 54% cumulative increase.

Now the average increase will be 16% in year one, 18.3% in year two and 8.5% in year three - rounding up to a 48.9% cumulative increase.

The increases comes on top of a regional council rates review from earlier this year that saw the council switch from land value (LV) to capital value (CV) to calculate its rates, meaning many homeowners would pay more of the overall rates pie and farmers and forestry owners less.

Regional council chair Hinewai Ormsby said councillors had heard community feedback and had looked hard at options to reduce the impact of the proposed rates rises.

She said the proposed rates increases were able to be dropped through further internal savings, including keeping 20 permanent roles vacant for three years, subject to the outcome of efficiency reviews.

Additional savings will also be clawed from public transport - $1.1m in the second year and $1.76m in the third year.

The regional council will also request a special dividend of $2.85m from the Hawke’s Bay Regional Investment Company Ltd (HBRIC Ltd) to help maintain the HB Tourism funding in 2024-25, fund its rates remission budget in 2024-25 and provide $400,000 to support biodiversity and biosecurity efforts in the next three years.

The Hawke’s Bay Regional Investment Company Ltd (HBRIC Ltd) is a council-controlled organisation (CCO) which manages some of the regional council’s larger infrastructure investments around the region.

According to financial statements from 2023, HBRIC had $344.4 million in equity compared to $369.5 million the year before and had generated a net profit after tax of $7.241m as at June 30, 2023.

Regional Council chair Hinewai Ormsby said the rates increases were dropped through further internal savings including keeping 20 permanent roles vacant for three years. Photo / Warren Buckland

The HBRC put forward five “Tough Choices” in draft consultation documents for the 2024-2027 Three-Year Plan, which were cost-cutting measures to help manage rates increases while paying for recovery from Cyclone Gabrielle.

The Regional Council faced backlash from local tourism operators for its proposal to fully defund Hawke’s Bay Tourism over two years, with significant funding cuts within the first year.

Councillors decided on an alternative option for Hawke’s Bay Tourism to maintain $1.52 million in funding for 2024-25, giving the organisation more time to secure funding from other sources, but made no funding commitment beyond that.

George Hickton, chair of Hawke’s Bay Tourism, said Hawke’s Bay Tourism appreciated the council’s decision allowing them time to engage with central and local government on new ways to fund regional visitor attraction for the long-term.

“Three [local] councils have already indicated future funding support for Hawke’s Bay Tourism from 2025, through a mayoral letter to HBRC tabled during the submissions process,” Hickton said.

“It’s now time to convert that sentiment to committed funding for 25-26 and beyond. A vibrant visitor economy is good for everyone who lives in Hawke’s Bay. We now have 12 months to make sure it stays that way.”

“Hawke’s Bay Tourism will work with local and central government, the tourism sector, and other entities to investigate and identify alternative funding initiatives to ensure the maintenance and protection of the Hawke’s Bay reputation and brand and a desirable visitor destination.”

The regional council was also considering whether to stop its annual contribution of $120,000 to Te Mata Park Trust for three years and cut funding for maintenance of regional parks, currently $1 million, by a total of 60% over the next three years.

Councillors decided to retain the Te Mata Park Trust funding for the next three years, but otherwise reduce funding for the regional parks as consulted on.

They also agreed to end the Sustainable Homes programme and reduce funding available through the Erosion Control Scheme as per staff recommendations.

Councillors called for special reviews of the Revenue and Finance Policy around the targeted rates schemes for Upper Tukituki and Public Transport, agreed to fund the capital costs of post-cyclone schemes in Whirinaki and Pōrangahau from the general rate given the unexpected costs to small communities and agreed to bolster funding of $1.3 million for Civil Defence over three years.

Councillors also agreed to make rates remission available to ratepayers paying the targeted public transport rate who were experiencing a greater than average impact or hardship.

Hawke’s Bay Today reported that one Havelock North resident was facing a $700 proposed annual targeted rate for public transport.

A new rates remission policy will offer a 50% remission for one year to reduce the impact on “stand-out ratepayers” on the utilities rolls, some of who were looking at proposed rates hikes of more than 500%.

Adoption of the Three-Year Plan is scheduled for July 10.

James Pocock joined Hawke’s Bay Today in 2021 and writes breaking news and features, with a focus on the environment, local government and post-cyclone issues in the region. He has a keen interest in finding the bigger picture in research and making it more accessible to audiences. He lives in Napier. james.pocock@nzme.co.nz