Inflation, interest rates may hike rates
Rocketing inflation and rising interest rates look likely to push Waipā rates up towards six per cent for the coming year.
Councillors will meet on Tuesday (March 7) to debate the potential rates rise as part of the 2023-24 draft Annual Plan discussion. Annual Plans identify and confirm budgets for the coming year and also set rates.
Waipā’s 2021-2031 10-Year Plan provided for a 3.7 per cent rise next year. But by late 2022, staff warned the impacts of inflation and interest rates made that figure unrealistic without cutting back on key services. Councillors agreed, directing chief executive Garry Dyet to set a draft Annual Plan based on a potential average 5.9 per cent rates rise after growth.
Staff will present the draft Plan on Tuesday but Dyet said delivering it would remain challenging.
“We’ve got inflation tracking at 7.3 per cent, more than twice what had been budgeted. Interest rates are now close to five per cent compared to the 1.15 per cent we’d allowed for in our 10-Year Plan. And now we’re seeing the impacts of supply chain issues further pushing prices up and butting up against staff and contractor availability.”
More recently the district had taken a hit from Cyclone Gabrielle smashing trees and damaging parks plus some roads and paths, largely in Cambridge, he said. Council has already warned the clean-up could take months and a potential price tag could be upwards of $200,000.
“It’s a perfect storm and Councillors will have to weigh all of this up on Tuesday before they land on a work programme and rates figure they are comfortable with.”
The staff report to be tabled next week notes Councillors must also factor in a revaluation of properties in the district, noting final valuations won’t be available to property owners until early April. Early indications are those revaluations will impact most on the capital value of residential properties, not rural properties.
The staff report also noted four unbudgeted funding requests; $110,000 to the Cambridge Town Hall Trust, $12,173 to Waikato Screen New Zealand; $750,000 to the New Zealand Sports Hall of Fame; and $70,000 to a youth employment hub in Te Awamutu. Staff were recommending only one request be supported – an extra $110,000 to the Cambridge Town Hall Trust. The Trust manages the iconic Town Hall on behalf of Council.
“Councillors have given the Trust a clear direction the Town Hall needs to be better used and made a much more useful asset to the community,” Dyet said.
“The Trust can’t do that without an injection of funding. Staff support the request, noting it will paid for by a targeted rate on Cambridge ratepayers. But at the end of the day, it’s up to elected members to make that call.”
Councils are only required to consult on Annual Plans where there are big changes to work programmes outlined in 10-Year Plans. No major changes are planned and the recommendation is that no consultation on the draft Annual Plan is required given other extensive consultation already underway across the district.
