Council Absorbs Inflation but Sewerage Drives Large Urban Increase

In settling on the 2008/09 Annual Plan and rates, the council has recognised economic concerns in a special one-off decision.

However, the cost of the new sewerage treatment standards is driving a large 9.9% increase in the urban rate. With little likelihood of subsidy for the sewerage upgrade, “this is a huge ask on our community”, corporate services manager Peter Wimsett said. “One problem is that it is increasing a service that people cannot easily see”. It means typical urban rates may increase around $130 (inc GST), almost all to pay for the increased sewerage treatment.

“Council has absorbed almost all inflation for the coming year by drawing on savings and the short term measure of not funding some depreciation. Cost cutting was also undertaken in leading up to producing the plan”, he said.

Water treatment upgrades, finding better water sources and the investment in stormwater pipes are the other major areas contributing to the increased urban costs. While these cost increases have been predicted for many years, they cannot be deferred. Manager District Assets, Stephen Taylor, advises “More work will be required on water supplies in following years and it is really only the start of this work across the District.”

By contrast the rural sector rate increase is only 1.0% for rural ratepayers while the industrial/commercial sector’s rate increase is 0.7%, reflecting the absorbing of inflation. If sewerage had not increased, the urban rate increase could have been as low as 1.6%. With inflation predicted to exceed 4%, the clear message is that this cannot be sustained and must be viewed as a “one-off”.

However, Mr Wimsett notes that while most larger farmers are getting “a low rate increase”, farmers who must comply with the stringent water quality standards for the Manawatu-Wanganui river catchment have to directly fund these costs themselves.

Meanwhile there may still be ratepayers eligible for the rates rebate scheme for the 2007/2008 rating year, which - in a welcome move in the recent Government Budget – has now been indexed to inflation. Rate Rebate applications can still be made up to June 30, and anyone who believes they are eligible for the scheme but has not yet contacted the council should do so.