Whanganui District Council unveils six-point plan to tackle rates

Chief executive David Langford says trade-offs, sacrifice, discipline and self-control will be needed from the council. Photo / Bevan Conley

Whanganui ratepayers could face an increase of 14.8 per cent in 2024, despite the Whanganui District Council working on a plan to ease the rates pain.

Mayor Andrew Tripe unveiled potential rates scenarios - high, medium and low - for the next three years during a council workshop this week.

The high option could mean a 14.8 per cent increase next year, followed by 3.8 per cent in 2025 and 3.7 per cent in 2026.

Tripe said rates would be at historically high levels “just to do the basics” but Whanganui was better placed than other centres such as Wellington and Hamilton, both of which were facing increases of more than 20 per cent.

For the 2023/24 financial year, the average residential rates increase in Whanganui was 8.1 per cent but there were dramatic fluctuations between suburbs.

It was a matter of balancing community affordability and progress, he said.

The medium scenario would be a 9.5 per cent increase next year, followed by 6.7 and 6.1, with the low being 5.8, followed by 5.9 and 4.7.

Six-point plan to reduce rates

Tripe said the council had come up with a six-point plan for rates reductions - increase the ratepayer base, improve council efficiency, explore alternative funding for projects, cut council services, sell assets to repay debt and identify sources of non-rates revenue.

“My personal preference is that we bear the pain in year one of the LTP [council long-term plan 2024-2034], with a high rates scenario,” Tripe said.

“That means we can pay off debt that much faster, which allows our finances to be in a good position quicker so we can do more to build the community up in the following years.”

He said there was no easy answer to the rates situation and no formal decisions would be made until the community had been heard.

Council chief executive David Langford said trade-offs, sacrifice, discipline and self-control would be needed from the council.

He said $45 million of saleable assets - a mixture of land, property and carbon credits - had been identified, $16m of which would need to be sold next year to meet the medium rates scenario.

That scenario would also require the council to find $2m of savings from service cuts in the first year.

Council to investigate opening quarry

Land owned by the council was suitable for operating as a quarry, a potential option to save money in later years, Langford said.

Whanganui District Council chief executive David Langford. Photo / Bevan Conley

“We are going to explore whether we can get resource consent.

“If we do, there are opportunities to cut the cost of our roading services by providing our own metal and stone for road building.

“It could also be sold commercially which would provide an income for council.”

Other potential investments “on behalf of the community” were the construction of a parking building in the central city, and investing in and developing a hotel, Langford said.

A business case prepared by property and open spaces general manager Sarah O’Hagan said the hotel project would cost $40m over three years.

Early assessment put income from the hotel “in the vicinity” of $4m per year.

In all three scenarios, there would not be a reinstatement of grant funds previously cut or an increase in the level of service of berm mowing.

Under the low scenario, there would be no increase in the level of aquatics service and no increase in funding for the Whanganui Regional Museum.

Kerbside recycling in all rates scenarios

Langford said the council’s kerbside recycling service was included in all three scenarios because the project was “too far down the road to abort the implementation of those services”.

Collection trucks were already on order.

Increases in road maintenance and renewals and an increase in Three Waters capital expenditure were included in all three scenarios, although the amount reduced in the medium and low scenarios.

Tripe said some councils were “heading into a calamity” in terms of rates, especially those with high debt and suboptimal investment in Three Waters Infrastructure.

Whanganui was not one of them and the council was in good order, he said.

“It’s fair to say things are tough for many people; however, I note that business confidence [in New Zealand] is the highest it has been since 2015 and interest rates have hopefully plateaued.”

Mike Tweed is an assistant news director and multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.