Council Costs Increase
14 June 2002
A dramatic increase in insurance premiums paid by Hutt City Council is likely to require a one per cent increase in rates, said General Manager Finance Tony Stallinger.
"We had been budgeting for a 30 per cent increase in premiums. However our insurers have indicated the increase will be far more significant, said Tony Stallinger.
"We are continuing to look at our options, but expect to be facing an increase in premiums of up to $500,000 - meaning a one per cent rates increase could be required," said Tony Stallinger.
As a rough guide every additional $560,000 of expenditure requires an average one per cent increase in the rates requirement.
"It is now extremely difficult to obtain insurance cover for earthquake risk in the Wellington region. Insurance companies are not prepared to increase their exposure to earthquake risk in Wellington, so the only insurance companies quoting are those that are providing the cover at present."
Policy excesses are also increasing significantly. The excess on the new Seaview Wastewater Plant is increasing from $10,000 to $2.5 million.
"Wellington Regional Council has informed us that they are likely to reverse a previously announced reduction in the bulk water levy, adding a further $200,000 to our budget, or another 0.4% to rates. The reason given for the reversal is increased insurance costs and utility rating charges on the water network."