Rates increase slashed by 69 per cent

Far North District Council has slashed a predicted 16.5 per cent total rates increase to just 5.1 per cent next financial year.

The total rates increase was agreed to during final deliberations on the 2024-27 Long Term Plan (LTP) held yesterday (Thursday 6 June).

Kahika Moko Tepania says councillors and staff went through budgets line by line to find more than $8.5 million in savings for the 2024-25 year, bringing the total rates increase down to 8.5 per cent. That figure was further reduced to 5.1 per cent after councillors agreed to request a one-off special dividend of $5 million from the council’s commercial arm, Far North Holdings Limited.

Kahika Tepania says the savings were made possible by pushing some spending in the capital works programme (building and engineering) out to future years. This will only impact capital projects not yet started. Savings were also found in operations budgets (day-to-day running of the council). These were made across the organisation and include reducing consultancy fees right through to cutting catering budgets.

The three-year Long Term Plan, dubbed a “catch-up LTP”, focused on repairing damage to roads and other infrastructure caused by a series of destructive weather events that hit the district in 2022 and 2023. The government allowed eight councils, including Far North District Council, to produce LTPs covering just three years instead of the usual 10 in recognition of the extra challenges faced in repairing the damage.

The council initially proposed a 16.5 per cent total rates increase. This was on par with increases proposed by many other councils in Aotearoa, as each grappled with spiralling inflation, increased insurance and contractor costs, and increased infrastructure bills.

“Residents told us during Long Term Plan consultations that the proposed 16.5 per cent rates increase for our first year was far too high,” Kahika Tepania says. “I know that in this economic climate no increase is welcome, but I’m happy that the cost savings we have found today mean our total rates increase will be less than the rate of inflation.”

Addressing the $5 million special dividend request from Far North Holdings, Kahika Tepania explained that the council had created the council-controlled trading organisation to make money and to offset rates. “I’m very excited to make this request. This will hugely alleviate the rates increase and burden for our ratepayers for the upcoming financial year. A dividend of that size is only possible because our commercial arm has proved it can make savvy investment decisions that benefit the local economy and ratepayers.”

He cautioned that the 5.1 per cent increase was indicative only. “Every property is unique. Different rates are applied to rural and commercial properties and reflect access to specific services, such as water and wastewater.”

Increases to the total rates take over the three years of the Long Term Plan now stand at 5.1 per cent for 2024-25, 11.43 per cent for 2025-26 and 7.2 per cent for 2026-27. These figures will be confirmed when the council adopts the LTP and strikes rates for 2024-27 at its next meeting on 26 June.

Property owners can find out exactly how much they will pay by entering their address into the online Rating information database. This will calculate the proposed rates from 14 June.