Rates below forecast

The proposed rates rise in the Queenstown Lakes District Council has come in below forecast despite some unexpected costs, QLDC finance general manager Stewart Burns said.

The council would be asked to adopt the Draft Annual Plan for consultation on Tuesday at Wanaka.
“This is a progression of the work around affordability that we started last year with the adoption of the 10-Year-Plan. The focus of the Draft Annual Plan has been to deliver greater value for money to our ratepayers,” Mr Burns said.

Adding to the challenge in the 2010/11 financial year were four issues that each had an impact on affordability to the ratepayer. None of the issues were provided for in the 10-Year-Plan:

• Reduced solid waste volumes leading to reduced net revenue ($502,000).
• Increased funding for Lakes Leisure programmes and activities ($356,000).
• Increased costs for legal and insurance in the regulatory activities ($552,000).
• Increased maintenance costs for additional reserves transferred to Council ownership ($211,000).

“In light of these costs Council officers were asked to produce budgets for 2010/11 with an emphasis on prioritisation of projects and value for money for ratepayers. They needed to find some significant savings,” Mr Burns said.

After a lot of hard work by everyone, council has been able to peg back what was an 11.9% average rate increase to a 7.95% increase.

“Clearly an 11.9% increase was unacceptable, given that the 10-Year-Plan forecast an increase this year of 8.5%. Under the circumstances a 7.95% average is a positive result,’ he said.

An extensive exercise was rigorously completed for both operating and capital expenditure. The results of the exercise were that:

Rate funded operating costs have been reduced by $1.07 million – this represents a significant saving to the original Year 2 budgets in the 10-Year-Plan. The savings have been achieved across the board.

The capital expenditure budget has decreased overall by $10.94 million (16.0%) from $68.4 million down to $57.5 million. The draft capital programmes for Utilities has decreased by $6.08 million (23.9%). This reflects the deferral of several wastewater and stormwater projects in the Queenstown schemes.

The property activity shows a reduction of $3.34 million which again reflects the deferral of non-essential projects; this time in the form of development of Council land. This will be deferred until market conditions improve. The Community capital programme has also been significantly reduced from $9.03 million down to $7.13 million (down 21.1%).

As a result of the changes in the capital budgets, interest costs have reduced by $308,000 and capital funding from rates has reduced by $512,000.

The Draft Annual Plan submission period would open on 17 April, with submissions closing on 17 May. A summary and submission form would be widely distributed later in the month, with public coffee sessions scheduled for early May.