As many of you will now know, Napier City Council has made the difficult decision to increase rates by 4.8% for 2020/21. I know this is a tough time for many of you, so let me explain our reasoning behind how we came to that decision.
Before COVID-19 began to significantly affect New Zealand, our original plan was to propose a rates increase of 6.5%. Then the lockdown began, and COVID-19 began to severely affect our nation’s economy. This had a huge impact on Council’s business activities.
During Alert Levels 4 and 3 we have lost important revenue from our closed tourism facilities, community facilities, halls, sportsgrounds and pools that are not being used. We also had reduced income from things such as food and liquor license fees and public parking fees. This will continue to impact in Alert Level 2.
After taking into account this lost income, as well as our proposed rates relief package, there was a total rates impact of 11.96%, on top of the original proposed 6.5%.
Recognising the hardship currently being faced by our community, this of course was never an option and we have worked very hard over the past four to five weeks to reduce this. We found savings that could be made in other areas of around $3.7 million to help offset the lost income. As well, we are proposing using reserves of $6.74 million, which is how we have reduced the proposed rates increase down to 4.8%.
Some will question whether an increase at this time is appropriate or fair. We rejected a blanket rates freeze because it does not help those who are most in need. Council took this decision very reluctantly, but we stand by the decision as being the best one for Napier, for both current and future generations. Any costs that are delayed or funded in different ways will only result in shifting this year’s rates burden onto future years and consequently rates would be much higher in those years.
Our overarching aim is to be as fair and equitable as possible and ensure that nobody falls through the gaps. We are therefore proposing a targeted relief package to work alongside government initiatives. I believe this strikes the right balance between supporting those of you in need now and stimulating our economy. I want you to know that we as a Council are absolutely focused on ensuring that our city comes out of this pandemic in a strong and resilient position.
If you’re a Napier resident or ratepayer, you’ll have the chance to provide feedback in June on our proposed rates increase and proposed rates relief options in the Draft Annual Plan 2020/21.
Our proposed relief options include:
- Removing rates penalties for last quarter of this financial year 2019/20;
- A residential and commercial rates rebate in 2020/21 for those in serious hardship;
- Rates remission and postponement options;
- Reducing our rates penalty charges during the first two quarters in 2020/21;
- Providing rent and lease relief for commercial customers.
I look forward to engaging with you throughout the Annual Plan consultation and we are in the process of developing the framework for what this will look like depending on the Alert Level we are in from mid-June.