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Council's Draft Annual Plan looks at revenue and expenditure

7 March 2014

Council's Draft Annual Plan takes close look at revenue and expenditure

Horowhenua District Council has taken a close look at its finances in the development of its Draft Annual Plan 2014/2015, which is to be published on March 20, 2014.

Mayor Brendan Duffy says that in the past eight months, serious consideration has been given by both Councillors and Council’s senior management to current operating costs and changes have been made resulting in a reduction of $1.5 million dollars in operational costs.

"It is important that Council takes a strong and prudent approach in managing its finances in the years ahead, whilst completing the previous Council's agreed infrastructure programme, such as for water and wastewater, as well as maintaining current levels of service," Mayor Duffy said.

The Draft Annual Plan outlines the planned projects and activities, based on year three of Council's 2012 – 2022 Long Term Plan.

It is to be put in front of the Council on Wednesday March 12, 2014 for adoption. This will be followed by extensive public consultation until the adoption of the final Annual Plan 2014/2015 in June 2014.

The proposed Draft Annual Plan 2014/2015 incorporates a rates requirement of $29.6 million, which will require an average 9.92% rates increase for 2014/2015.

Chief Executive David Clapperton is confident that the proposed Draft Annual Plan 2014/2015 is retaining both financial prudency and high-quality services for the District.

"The rate increase, while high, is realistically what is required to ensure we are following a long term plan on behalf of the community that promises financial prudence and sustainability," Mr Clapperton said.

"The overall rate requirement for the coming year actually shows a decrease of 0.47% to that projected for Year 3 of the Long Term Plan."

The key drivers for the proposed rate increase include a reduction in profit on property sales, an increase in loans servicing costs, increases in community and library costs and decreases in economic development revenue and parking revenue.

Other key drivers include increases in interest rates and an increase in funding for the ongoing renewal of assets, such as pipes in the ground and treatment plants (financially defined as depreciation).

There are also major capital projects such as the construction of Levin's new water reservoir, renewals of consents for wastewater and ongoing maintenance, continued road upgrades, resealing the Levin Domain Cycle Track and many others included in the proposed Draft Annual Plan 2015/2015.

Mr Clapperton says a complicating factor with the 2014/15 year’s rate increase is the effect of the recent revaluations on the incidence of rates for individual properties.

"Some properties on the fringes of urban areas have seen a very significant increase in land values reflecting the change in zoning to residential. While Council does not rate based on District Plan zones, the change in zoning has affected the valuations of these properties, which in turn affects the level of rates such properties will be levied for the land value-based General and Roading rates."

Mr Clapperton says the Council must take a sensible approach to setting a budget for the 2014/2015 year in order to meet statutory requirements under section 100 of the Local Government Amendment Act – essentially "to balance the budget".

"In coming months I will continue to work with Council's Finance Committee to develop robust strategies to manage the Council's debt portfolio, including the possibility of asset sales to reduce debt," he said.

The Draft Annual Plan 2014/2015 will be published on Friday March 21, 2014. The public have until April 22 to make submissions, with public hearings of submissions to be held on May 7 and 8, 2014.

The Council will meet for deliberations on May 21 and 22, 2014, with the Draft Annual Plan and rates resolution to be adopted at Council's meeting on June 4, 2014.

The public will be able to access the Draft Annual Plan 2014/2015 online, or alternatively at Council's service centres in Levin, Shannon and Foxton.


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