The axe is falling on some of the Taupō district's major projects as its council seeks ways of affording a zero per cent rates increase and offsetting an expected decline in other revenue.

Taupō District Council chief executive Gareth Green has also said he will take a salary cut, although the size of the cut has not yet been determined.

Last year the Taupō District Council raised 79 per cent of its income from rates, with the rest coming from other sources such as fees, charges, leases and development contributions.

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While it has not been decided by a formal resolution yet, Taupō district mayor David Trewavas said the 11 councillors had informally decided that the council should aim for a no greater than zero per cent general rates increase in the upcoming financial year, which begins on July 1. The projected average general rates increase in the council's Long Term Plan is 3.02 per cent.

However, given the council's revenue streams had also been drastically affected by a downturn in development, cancellation of events, and a drastic reduction in the amount of fees and charges it collects, a no more than zero per cent general rates increase would be no easy task, and some tough decisions would need to be made.

A concept drawing of a possible council administration building in Taupō. Photo / File
A concept drawing of a possible council administration building in Taupō. Photo / File

"No doubt there will be a change in revenue, but what it is, we are not sure," Mr Trewavas said. "In probably six months time we'll have a reasonable idea of where that income level drop is. We've got to budget for a significant drop anyway."

Tourism, one of the district's four major industries, has been hard-hit by Covid-19 with domestic and international tourism at a complete standstill since the middle of last month.

However, Mr Trewavas said Taupō was still a desirable district to live in and was "mildly confident" that the district's three remaining core industries of geothermal, forestry and agriculture would keep going.

"For us, this starts now by creating a new annual plan with a view of ensuring that we avoid rates increases that were going to come as a result of new projects, increasing costs, and revaluation of properties.

Taupō district mayor David Trewavas. Photo / File
Taupō district mayor David Trewavas. Photo / File

"We will be looking at delaying any projects, like the council administration building, that are not time critical, reassessing our current levels of service and making some hard decisions to achieve this, but it is a goal we are 100 per cent committed to," said Mr Trewavas.

He said the question of pay cuts for councillors had been raised informally and it was up to individuals to make their own decision as to what they felt comfortable with. The mayor and councillors' remuneration is set by the Remuneration Authority in Wellington.

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Mr Trewavas said he and many of the councillors used part of their salary to support various local organisations and charities and wanted to continue to do so as they would be struggling at present.

"We have made a commitment to buy locally where possible to help local businesses bounce back."

Council chief executive Gareth Green said council income from fees and charges had taken a huge hit along with investment income and development contribution income. The council is also giving one-month lease fee waivers to its commercial tenants and three-month lease fee waivers to its community tenants to help them deal with the impact of Covid-19.

The only project the council was talking about delaying at present was the civic administration building project, Mr Green said, but some other capital projects would be changed or delayed as the council went through its annual plan process looking for savings to arrive at the no greater than zero per cent general rates increase.

Taupō District Council chief executive Gareth Green. Photo / File
Taupō District Council chief executive Gareth Green. Photo / File

"There will be some capital projects that we need to delay and some operational savings that we need to find.

"We'll be looking at every single line to see where we can make savings."

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Mr Green said council staff had already been told there would be no pay increases this year. There would be other cost savings that could be made such as moving some staff to a four-day week, cutting out travel to conferences and training, not replacing vehicles and the like.

The council had a recruitment freeze in place and that would save 50 to 60 positions per year without having to make any positions redundant, which was in itself costly.

Mr Green plans to take a salary cut and said he would know how much once the council had crunched the numbers to get to the zero per cent general rates increase.

"I'll certainly be showing leadership and the expectation is my executive team will be part of that."