To fund the Plan, Palmerston North City Council is proposing total rates need to rise by 3.8 per cent, slightly lower than previously forecast.
"It was a rigorous four hour debate today. We want to achieve a balance between public expectations, the delivery of services and the cost both in terms of rates and level of debt," says Mayor Grant Smith.
PNCC Chief Executive Paddy Clifford says Council is being cautious about its spending.
"We're proposing to keep the rate rise below last year's 3.9 per cent forecast. We are able to do this due to a combination of prudent financial management, greater efficiencies and we've also benefitted from lower interest rates on council borrowing."
More than a third of the increase is being used to pay for the renewal of water and wastewater services agreed to last year.
Mr Clifford says Council's debt is now projected to be $122 million in June 2017 - $16 million less than previously estimated.
Council's proposed Plan reinforces the direction set with the adoption of the 10 Year Plan last year. A number of minor additions are proposed. Many of these are about improving the way Council consults and communicates with residents; making Palmerston North a more exciting place to live and visit by having more events and festivals; and improving the way people move around the City.
"We have included all of the projects in the Long Term Plan along with the "Library of the Future" upgrade project and some extra event funding. We now want residents to give their views on them," says Mayor Smith.
Like all councils in New Zealand the City's rating valuations are updated every three years. The 2015 valuations will be used as the base for setting the rates for 2016/17.
Council's Strategy Manager - Finance Steve Paterson says the new values do not create additional revenue for the Council. Instead they change the way rates are distributed amongst ratepayers.
Overall, commercial land values have reduced so owners of residential land will now pay a bigger share of the rates.
The increasing popularity of Kelvin Grove, Ashhurst and Aokautere as places to live has led to property value increases above the City's average. As a result, when the new rating year starts in July, ratepayers in these areas will face higher than usual rates increases.
Key points of the Annual Plan 2016/17 are:
- Council services as usual with minor additions
- Budget adjusted for timing of projects, lower inflation and interest rates
- Total rates increase of 3.8% (last year we estimated it would be 3.9%)
- More than one third of the increase is to fund increased water and wastewater renewals as agreed to last year
- Council's debt at 30 June 2017 now projected to be $122 million - $16 million less than previously estimated
- New property values mean rates will be spread differently than before - rates in some areas will increase by a lot more than others
- Because total commercial land values have decreased more of the total rates will be paid by residential ratepayers.
The proposed Annual Plan is scheduled to be formally adopted by the Council at its meeting on 7 March and the consultation period will run from 18 March.
A consultation document providing more information will be delivered to all households on 30 March and ratepayers wishing to make submissions to the Council about the Plan will have until 19 April to do so.