Your rates for the next 10 years
Your rates over the next decade will need to increase significantly. For the first year of the long-term plan (2024-25), total rates will need to increase by 11.3% to fund increased operating costs and to service our debt that we borrow for capital projects.
Operational costs are generally the day-to-day costs involved for a council running a city, while capital costs are generally our construction projects.
Around half of the increase we are currently facing is to cover increased interest costs and repayment of our current debt used to fund past infrastructure projects. We use debt to help fund these big projects to spread the cost over those who will benefit from the asset over its life. They work like a mortgage with us paying interest and principal back each year.
We’ve also had some big increases to our insurance and utility (power and gas) costs – just like you have.
As we’ve also been updating our software over the last few years, this has meant we’ve had to increase our licensing costs to access these programmes – it’s really expensive and unfortunately we need them to help keep the city running.
Like other cities in New Zealand our proposed rates increases throughout the term of the plan are higher than previously assumed would be necessary.
The Year 1 cost increases for our operational areas
| Operating cost |
Impact on rates for 2024-25 (Year 1) |
| Interest costs on debt |
4.2% |
| Debt repayment |
2.1% |
| Rolling average renewal increase |
0.8% |
| Labour costs – market movement |
3.6% |
| Utilities and insurance |
0.4% |
| Software licences |
0.6% |
| All other – contractors, professional services, materials etc, offset by additional revenue (excluding rates) |
(0.4%) |
At this stage, we have assumed that the cost of the planned Nature Calls project will be funded through the IFF tool
The sum levied by the external entity would be in addition to the rates increases shown, but would be shown on your rates bill as a separate levy. We think this levy will start to be phased in around Year 4, or after construction has started.
It is too soon in the planning process to know with any certainty how much the repayments will be but early estimates are that the levy for each ratepayer could be at least $1,000 per year over 30 years (over and above your rates costs).
Proposed annual increase in total rates requirement over next 10 years
This graph shows the increases in total rates needed, as well as the maximum increases that would apply each year according to our policy. Rates increases for individual properties will vary depending on their value, the nature any future improvements to the property and property use. They will also depend on any changes to the rating system. Rates are reviewed annually as part of our Annual Budget process. The rates increases shown here do not include the funding needed to cover the costs of the proposed Nature Calls wastewater project.
