Ocean Spa on Marine Pde, a NCC facility has been one of many suffering financially in the Covid-19 pandemic environment. Photo / Paul Taylor
Hawke's Bay mayors and council chief executives say they're trying to cost cut to prevent rate hikes across their councils, but won't be cutting their own pay.
Only 51 per cent of Napier City Council's revenue comes from rates, and with many of the tourism-oriented organisations it operates closed due to level 4 and level 3 Covid-19 restrictions it is facing a significant deficit over the coming months.
Rates increases for Napier residents as high as 14 per cent have been quoted in the past week, but Napier Mayor Kirsten Wise said in a video update on Facebook this would not happen on her watch.
Wise said the council had been reviewing the annual plan in the last few weeks, and it would be debated at a council meeting on April 30.
"It includes recommendations on our proposed rates relief package and a 4.8 per cent rates increase for the upcoming year," she said.
She said there had been a proposed rates hike of 6.5 per cent prior to the coronavirus outbreak, and one recommendation she had seen suggested a 17.7 per cent likely rates increase due to Covid-19, "as a result of significant reduction to tourism-based income streams".
The council owns facilities including Ocean Spa, the National Aquarium and a 26 per cent stake in Hawke's Bay Airport, which have all been hit hard by the Covid-19 crisis.
"Only 51 per cent of our revenue comes from rates and it's now estimated council will have a net rating deficit of $3.1 million for the remainder of the 2019/20 year and a revenue decrease of $7.5m in 2020/21," she said.
Central Hawke's Bay mayor Alex Walker said the district also had a proposed rates increase, but this was primarily driven by increased drinking water compliance costs and increased insurance costs, not Covid-19.
"Since the development of the upcoming Annual Plan 2020/21 budget in late 2019, councillors directed for the increase to be reduced from 6.2 per cent down to 5.1 per cent and it is now at 3.8 per cent, a removal of $283,000 from the planned budget," she said.
"The most recent reduction was directed by council only two weeks ago and included a reduction in the targeted wastewater rate which will specifically reduce impacts on households and commercial operators like bars and motels where they pay for multiple plans."
She said staff had been directed to continue to re-shape the budget over the next 12 weeks until its adoption.
She said she was committed to ensuring that those who need the most support will get it but would not be taking a pay cut.
"We have adopted a plan with 18 different measures for reducing impacts in our community through a variety of mechanisms," Walker said.
"The pay of elected members is decided and controlled by the independent Remuneration Authority under its own legislation.
"By legislation, any 'pay cut' signalled by a Mayor or elected member would not result in a reduced rates bill and can only be followed through on by that individual elected member making a personal decision to donate part of their post-tax pay to a donation of their choice. These are personal decisions," she said.
Walker said CHB council was working long "hard" hours and did not deserve to have expectations about personal salaries placed on them.
"I will not be signalling a 'pay cut' and will continue to donate, invest in and serve my community to the best of my ability with a responsibility that I feel very strongly about."
Hastings District Council mayor Sandra Hazlehurst said the annual plan proposed a rate increase of 4.6 per cent.
This was primarily for the safe drinking water programme, public security improvements at some of the council facilities and changes to the refuse and recycling collection services.
"Covid-19 has meant our annual plan and budgets need to be reassessed .... to acknowledge that the community has also been financially impacted as well.
"Council is very carefully assessing all operational expenses to look at ways to cut expenditure and re-prioritise projects with a view to reduce rates."
Hawke's Bay Regional Council in March signalled a freeze on rates increases due to ongoing coronavirus concerns.
Councillors sought urgent advice from the chief executive James Palmer on the issue at a meeting, before stopping a proposed increase.
Council chair Rex Graham told Hawke's Bay Today he would not be cutting any pay from any staff including himself and his councillors to achieve this.
"The staff have never worked as hard as they are doing now and we need to support them. I am not going to cut any wages and it is really important we support and keep all our staff," he said.
"But we will be postponing rates increases for now."
Hazlehurst and Wise told Hawke's Bay Today they will be giving an undisclosed amount from their pay to organisations in the region contributing to the Covid-19 recovery.
Wairoa Mayor Craig Little did not respond to a request for comment for this article.
He's previously instructed staff to "sharpen-up the pencils" to try to keep costs down, but said it's too early for his council to be contemplating not increasing rates this year, because it has costs which have to be met.
All five council CEOs sent a joint statement saying they were considering a range of measures to assist ratepayers, but reducing wages will not be part of this.