Whangārei ratepayers facing huge 17.2 per cent rates hike

Ratepayers are facing a 17.2 per cent rates increase. Photo / Michael Cunningham

Whangārei District Council (WDC) is looking at a record 17.2 per cent rates increase as it finalises its proposed $2 billion budget for the next decade.

The proposed rates increase for the Whangārei District’s 46,000 rateable properties is the council’s highest general rates lift and first to reach double digits.

It is almost double the council’s previous highest rates increase of 9 per cent in 2015/2016.

Whangārei Mayor Vince Cocurullo said the proposed 17.2 per cent rates increase for the 2024/2025 financial year would enable the council to maintain what it offered ratepayers, and no more.

“This is the cost of running our [essential] infrastructure - it’s not about all the extra bells and whistles,” Cocurullo said.

The size of the proposed increase did not mean the WDC had been under-rating in previous years, nor did it mean he had failed as mayor, he said.

Cocurullo said major increases in construction and insurance costs contributed to the rise.

An example was the cost of building a bridge, which had climbed by 40 per cent since 2021.

The rates increase is outlined in the WDC’s draft proposed Long-Term Plan (LTP) 2024-34 public consultation document, which was discussed at a council meeting today.

The document said council roads needed urgent attention.

The WDC was also falling behind in ensuring its district’s resilience to storms and cyclones.

The price of goods and services had risen quickly over the last few years and the council’s income no longer covered everyday costs.

“We’re not alone in this. Councils around New Zealand are having to come to terms with how to fund the wide range of significant and long-term issues councils are facing,” the document said.

It said the council needed significant rates catch-up to cover costs.

Cocurullo said the WDC was not alone regarding a big rates rise. Councils across New Zealand had signalled rates rises in the high teens for the coming financial year.

He said the proposed lift would still see the WDC within the bottom quarter of New Zealand’s council rates for the coming 2024/2025 year.

The general rates are paid on each property’s land value.

Whangārei Mayor Vince Cocurullo said the increase "is the cost of running our [essential] infrastructure".

Pātaua Residents and Ratepayers’ Association chairman John Emett said he was shocked by the proposed rates increase.

“That’s a big increase, considering inflation’s running at about 6.5 per cent. Why do we need it?” Emett said.

“People are hurting financially. That’s a big number and will only add to people’s financial pressure and the misery facing some people.”

Cocurullo said the last few years of inflation had brought a big increase in the cost of delivering the council’s core services.

“We have always had some of the most affordable rates in New Zealand and made our rates dollars stretch as far as possible.

“We have now come to a crunch point, and after months of looking for a way out, it has become clear we cannot cost-save our way out of this.

“Improving roads and resilient infrastructure does not come cheap.”

Every sector was facing cost pressures, Cocurullo said.

“When I first came into [the] council in 2007, a suggested rates increase of over 10 per cent was enough to make people gasp.

“Successive years of squeezing more and more work out of less and less money, trimming costs and maintaining a very lean level of staffing have brought us here.”

The dramatic increase for next year’s rates comes with other increases during the next decade.

Council water rates are proposed to go up by more than 20 per cent for the 2026/2027 and 2027/2028 financial years.

This is to go towards $90 million in wastewater treatment and disposal, plus stormwater catchment management for major Ruakākā growth and a $40m Poroti water treatment plant that would help future-proof Whangārei’s water supply.

Cocurullo said the Three Waters asset and debt return to the council books had not contributed noticeably to the 17.2 per cent proposed increase.

The draft LTP public consultation document said the WDC’s drinking water infrastructure was in good shape, but money was needed to meet the Government’s new drinking water standards.

The proposed LTP public consultation document said some of the council’s essential services would have to be cut in the case of a lower rate increase.

“We do not believe reducing services or cutting back on infrastructure investment is the right thing to do for our district.”

■ LDR is local body journalism co-funded by RNZ and NZ On Air.