Kaipara District Council is to cut almost $1 million off its operating costs to go ahead with a 3.97 per cent rates rise for the pending financial year.

The council on Wednesday decided to cut its planned 5.49 per cent rates rise to 3.97 per cent.

Council (KDC) mayor Dr Jason Smith said this was the best option.

KDC has slashed $951,000 from its 2020/2021 budget – including $333,000 from roading, $332,000 from staff costs (including a salary freeze, cutting back on casual staff and contractors, but no redundancies) and $105,000 from the cost of updating its district plan by pushing the process out across a longer timeframe.

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The rates reset was decided after a marathon two and a half hour debate that was streamed live on Facebook and is now available via the council's website - https://www.facebook.com/watch/KaiparaDistrictCouncil/.

Smith said Kaipara residents faced a challenging time.

The Kaipara Mayor's Taskforce for Economic Support and Recovery would help.

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Smith said it was important rates were set at a level that supported KDC's role as a key influence in the district's recovery.

The rates reset had also taken into account KDC's ongoing recovery from the austerity that was part of New Zealand's longest council commissioner tenure.

Councillors were adamant KDC did not increase its debt to fund the rates reset.

"We have been in a terrible position with debt and we don't want to go into that position again," KDC deputy mayor Anna Curnow said.

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Rates reset options also presented to the meeting included the status quo and a 0 per cent rates rise.

Smith said Kaipara roading would be the main area affected by the rates reset. But he said KDC had spent huge amounts improving its roads in the last few years.

Louise Miller, KDC chief executive, said the decision on next year's rates played an important role in how the district recovered through Covid-19. The rates reset decision was a balancing act of competing needs.

Sue Davidson, KDC general manager sustainable growth and investment, said the rates reset had to be considered in terms of the amount of cost saving required to fund it and where this would come from.

KDC is to increase one aspect of the council's general rating system - the annual amount charged per rating unit household. This "uniform annual general charge" or UAGC will be increased by 5 per cent from $728 to $764. KDC bases its general rating on land values. This part of the general rates will not be increased.

Davidson there was limited fat in the system for KDC to reset rates to lower than a 3.97 per cent increase.

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