News & Events

Approved draft Annual Budget drops from a 4.4% rate increase to 1.95%, following further reductions in operating costs

Wednesday June 10 2020

Palmerston North City Council today approved an updated draft 2020/21 Annual Budget, after significant changes to its first draft.

The increase in total rates collected is recommended to be 1.95% after further reductions of $550k in its operating expenses were incorporated following the Council of Committee meeting on 20 May. The percentage increase for each property will vary; examples indicate increases between 0.8% and 1.3% for residential rates and 2.5% to 3.1% for non-residential rates.

“During the finalisation of this draft budget, we had to consider the projected reduction in non-rates revenue from our venues and facilities, parking and the Palmerston North Airport dividend,” said Chief Executive Heather Shotter. “In delivering significant savings, we have worked through our budgeting process to maximise efficiencies, and continue to deliver key services without weakening our ability to meet community needs, particularly at a time when many are experiencing impacts from the pandemic."

The Council’s first draft Budget went out for public consultation before the Covid-19 lockdown with a growth-targeted proposed 4.4% increase, which was less than the 5.2% projection in the 10 Year Plan. After the economic impact of the pandemic and hearing public submissions, Council requested a revised budget with a reduction in operating expenses to ensure the proposed rate increase was 1.95%.

Mayor Grant Smith says, “We valued the submissions people made during the consultation period, which was during a very challenging time for everyone. This Budget takes into account the extraordinary economic and social impacts of the pandemic with a reassessment of the assumptions about costs, revenue and the availability of external resources to deliver our services and programmes. It’s pleasing we have been able to deliver a considerably lower increase than was previously projected. Any increase lower than 1.95% would threaten our ability to provide the current level of city services and derail opportunities for growth as a leading regional city.

“While the real economic impact of the pandemic is unknown, Palmerston North is in a stronger position than many of our peers. We had economic momentum ahead of the international crisis, and we have the resilience of a diverse economy that is strong in less-impacted sectors. The city has several significant infrastructure projects underway or in the pipeline, and it’s essential we can invest in and service major projects to stimulate economic recovery, employment and welfare. We will continue with our catalyst projects that shape our city to become New Zealand’s leading regional city while retaining our small city benefits.”

Council is set to adopt the Annual Budget on 24 June. Once adopted, it will be available on Council’s website and Council offices for viewing. Ratepayers will also then be able to check online what their 20/21 annual rates charge for each property will be.