Feeling the pressure of ratepayer resistance — 461 submissions and probably even more emails and sidewalk conversations — Hastings District councillors seem reluctant to move forward with their preferred option of a 25% rate increase for 2024/25.
This option consisted of an 8% ‘cyclone recovery’ charge and 17% for normal activities, including servicing debt.
So staff have been instructed to flesh out the impact of a 19% increase, to inform final LTP decisions to be made next Tuesday the 18th.
It looks like knocking six percentage points off the proposed 25% rate would require in the neighbourhood of $60 million in spending reductions.
Achieving the lower rate most likely would require slowing down spending on infrastructure, which makes up 75%-80% of the council’s spend.
As for what the HDC consultation document called “Nice-to-have” projects, the preferred option already assumed $50 million in deferred spending on things like Splash Planet, Civic Square and Tomoana Showgrounds development. It will be interesting to see what staff comes up with in terms of potential additional savings in this category.
Moreover, the preferred option already assumed a savings target of 2.5% would be achieved in Year 1 of the plan, but these savings were yet to be identified.
Said Mayor Sandra Hazlehurst:
“Three quarters of submitters told us they would prefer to go slower with our infrastructure delivery – we have listened and understand that things are difficult for many.
“We have asked staff to model the impact of a rate increase of 19 per cent and come back to us, so we can assess what the implications may be across the different sectors of the community.”
Stretching recovery work from the preferred 3 years to a 5 year programme could indeed itself reduce the rate to 19%, as explained in the consultation document. But would “just prolong the period of higher rate increases”. Moreover, such deferrals can be expected to lead to even higher future costs. Not easy being a councillor these days!
Mayor Hazlehurst also noted that HDC (presumably alongside HB’s other councils and the Regional Recovery Agency) will continue to advocate for more funding from the Government.