$250,000 shortfall after Wairoa District Council rates mistake

After a financial calculation error the Wairoa rates are on track to be reset. Photo / Warren Buckland

An error with the Wairoa District Council's formula for setting the district's rates will see a $250,000 shortfall in expected revenue.

Ratepayers were alarmed after they found themselves facing a 7 per cent average rate increase, rather than the expected 4.9 per cent average increase as set out in the council's 2017-18 Annual Plan.

So at an extraordinary council meeting today council will be asked to formally resolve to bring the increase back into line with the public and councillor expectations.

Wairoa Mayor Craig Little said the community had responded quite well considering the financial calculation error.

"There was an anomaly there. We fixed it. We could have easily swept it under the rug but we don't do that, we stick by our word," he said. "You make a mistake, you fix it".

The 4.9 per cent increase was taken to the public for consultation and followed what was in the Long Term and Annual Plans, but an omission was made when applying the manual formula to get the average. Urban ratepayers would have experienced increases from 7 to 9 per cent.

The council felt resetting the rates would restore community confidence in the organisation, but would mean a $250,000 reduction in revenue compared with the Annual Plan 2017-2018.

Yesterday council interim chief executive John Freeman said this meant the council would have make up this shortfall.

"We have to look at what projects can be moved from this financial year to next financial year, whether there's opportunities for savings," he said. "So it's about either not doing the work this year or delaying it or changing the scale of it."

Mr Little said the council had tried to carry out projects the public had been "hanging out for", such as more footpaths and filling in culverts.

"I don't want to see them stop because they're really important. There might be other projects we're looking at and we might just have to lie low on them and just say, we might have to wait."

The council could apply several other savings measures to "shave off" the shortfall, so that projects were not directly affected.

These ranged from not replacing council cars to drawing down loans at other times of the year.

Today's meeting will be the formal resolution to reset the rates. If approved, Wairoa ratepayers could expect to receive their new set of rates spread across four quarters soon. For those who had already paid the first instalment, there would be a reduction in their rates for the next three quarters.

"For those that have paid the full year already . . . they'll be able to opt for a refund or [be] able to opt for a credit against next year's [rates]," Mr Freeman said.

The meeting will be held at 1pm today at the Wairoa District Council.