Andrew Tripe says interest rates and high inflation will lead to a significant rise in rates for Whanganui. Photo / Bevan Conley
Andrew Tripe says interest rates and high inflation will lead to a significant rise in rates for Whanganui. Photo / Bevan Conley
Whanganui Mayor Andrew Tripe is warning ratepayers to brace for a tough 2023 that could come with high rates rises.
Tripe told a Whanganui District Council meeting factors such as increasing interest rates and high inflation could lead to a significant rates increase next year.
“It appears other councils havealready had their turn, or if not, will this time be affected like us,” he said.
“We will need to find ways to look after those who will find it hard the best we can, along with central government agencies and social service providers.”
Tripe said at some stage, Whanganui would need to “take the hit” when it came to rates.
“This will be in what will already be a difficult 2023, one where we just need to encourage each other to keep moving, knowing that things will get better.
“Economists are never wrong and they’re never right, but I’m hopeful by the end of next year or the start of 2024, we’ll be back on track again and things will start to look up.”
“In my inauguration speech, I used the phrase ‘the headwinds are starting to blow’,” Tripe said.
“This was a forewarning for what I see as some difficult times coming.”
Tripe said the council had made savings of about $2.5 million thanks to an ongoing activity and service review from chief executive David Langford.
Langford said there was a $460,000 saving from restructuring the council’s executive management team and by removing some vacant roles within the organisation that weren’t deemed necessary.
“We have made a $330,000 saving by changing how we account for our project management costs.
“This means that the costs fall onto our capital budgets instead of our operating budget. This reduces how much rates funding is needed to pay for these staff.”
A $50,000 saving was made by switching from having a staff member as an internal auditor to using a contractor on an as-needed basis, Langford said.
“We have set a 6 per cent savings target — $1.2 million — for our wages and salaries budget.
“Because organisations always have staff coming and going, it is rare that the organisation has 100 per cent of its positions filled.
“With some careful management, we think we can turn this into a saving without compromising the services we deliver to the community.”
Langford said small savings had been found across all operations.
“This includes things like delaying the replacement of some of our operational vehicles and making them run for another year or two. We have also cut budgets for things like printing, photocopying and stationery.”
Meanwhile, an annual report presented by senior financial officer Simon Manville showed the council was in decent financial shape at the end of June.
Philippa Baker-Hogan questioned whether people in Whanganui were being "over-rated". Photo / Bevan Conley
There was an operating funding surplus of $21.89 million — $5.1m above budget — and the debt balance of $107.3m was down on the budgeted balance of $121m.
The report says overall, the council has performed well in delivering services to the community within its budget constraints.
While she was sure Langford didn’t have “a whole stash of money sitting in his drawer”, councillor Philippa Baker-Hogan asked whether the operating funding surplus meant the council was currently “over-rating” people.
Manville said the report was prepared under international public sector accounting standards, which required reporting a range of non-cash movements within surplus and deficits.
Rates were set through the annual plan process, Manville said.
“Any surplus or deficit per any activity is used to repay loans within that activity.
“We are always putting that money in the bank against the activity we are collecting the money for, so that will offset any future costs.
“If you’re asking an opinion, no, we are not over-rating.”
Net cash flow from operating activities, which is all the money the council received (excluding borrowings) less all the money it paid out (excluding money spent on capital items), shows a surplus of $32.6m compared with a budget of $38.5m.
The main cause for the variance was the deferral of the Sarjeant Gallery rebuild, which resulted in a delay in receiving donations and grants to the tune of $5.9m.
The next Whanganui District Council meeting is scheduled for February 14.
