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‘Steady-as-she-goes’ budget for Horowhenua

Media Release: Monday 25 June 2018

‘Steady-as-she-goes’ budget for Horowhenua

Horowhenua District ratepayers will see a prudent, ‘steady-as-she-goes’ 20-year budget.

District Council Deputy Mayor, Wayne Bishop, said the Long Term Plan acknowledged the growth anticipated in Horowhenua while proposing reasonable rate increases over the next 20 years.

Horowhenua District Council will adopt the 2018-2038 Long Term Plan this week.

Mr Bishop said the plan shows Council in a good financial position, with a strong balance sheet.

“The average rate increase is 3.75% for the next 20 years,” he said. “At the same time we are maintaining a solid asset renewal programme, adding new infrastructure in growth areas and developing above ground assets, notably new footpaths and shared pathways.”

Significant investment in core water and wastewater treatment plants over the last 10 years has allowed Council to have sufficient capacity to handle the anticipated demand from an additional 10,000 people living in the Horowhenua within the next 20 years.

Deputy Chairman of the Council’s Finance, Audit and Risk Subcommittee, Councillor Barry Judd, said previous councils took a sensible approach in using debt to fund water and wastewater infrastructure upgrades since 2009.

“In the next two years, subject to resource consents being granted, all treated effluent will be discharged to land,” said Mr Judd. “Horowhenua District Council will be one of the few councils in New Zealand discharging all treated waste to land rather than water. While this carried a cost, Council is committed to improving water quality.”

Foxton and Tokomaru wastewater disposal to land will be completed by 2020.

“All water treatment plants, five in total, have been upgraded in the last six years,” said Mr Judd. “No major water treatment upgrades are required in the next 20 years despite the growth forecasts.”

Another key feature of the 20-year Long Term Plan are the planned operating surpluses over the entire 20-year budget, along with a balanced budget over the same period.

Levin Councillor, Bernie Wanden said higher rates increases over the past five to six years to fully fund depreciation will now result in Council balancing its budget, which means achieving an excess of operating revenue against operating expenses, and achieving operating surpluses of between $1m and $4m over the next 20 years.

The proposed rate increase of 6.53% in Year 1 of the draft 2018-2038 Long Term Plan has been reduced to 5.55% despite additional requests for funding being approved by Council following submissions to the Long Term Plan.

“As a result of an increase in the number of rateable assessments over the last 12 months the average rate increase for each household will be lower than if there was no growth in recent years,” said Councillor Wanden. “This is one of the significant benefits of growth.”

For example, an urban residential property with a property value of $225,000 and a land value of $83,000 will have a 3.93% rates increase in 2018/19. Without the recent growth, the increase would have been 5.29% (Table 1).

Another key feature of the next 20-years will be the selling of non-core property assets.

“Selling of non-core property assets is a good way of reducing Council debt and rates,” said Councillor Wanden.

Table 1: Rates – current, proposed and what might have been without growth

RatingCurrent rate 2017/18Proposed new rate 2018/19Rate without growth 2018/19
Residential urban (property value $225,000, land value $83,000)$2364$2457$2489

(% rates increase)


(% rates increase)

Business urban (Capital value $525,000, land value $175,000)$3,181$3247$3286

(% rates increase)


(% rates increase)

Rural residential (capital value $430,000, land value $163,000)$1760$1851$1867

(% rates increase)


(% rates increase)

Farming business (capital value $1.44M, land value $1.18M)$3440$3515$3526

(% rates increase)


(% rates increase)

Note: Horowhenua District Council is on a ten year journey to remove urban and residential rates differentials. Council is currently in year nine of the process, and 2018/19 will be the final year.


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