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Nelson City Council Outlines How 0% Rate Rise Will Be Achieved

Nelson City Council has heard how a 0% rate rise would be achieved at a meeting held via video-link on Thursday, 23 April.

A Council staff report outlined the changes that would need to occur to accommodate the 0% rate rise alongside lower than expected income from a number of sources including; parking, consent fees, and commercial revenue.

The report noted the following:

  • Just over $1m could come from reducing staff costs, including a staff wage freeze ($640k)
  • More than $300k of savings could be found with a 50% reduction in training and travel budgets for elected members and staff
  • Potential savings of $549k linked to the cancellation of Council-supported events
  • Council could reduce the Events Fund by $245k, retaining $200k so Council could still support events where possible at lower alert levels

Nelson Mayor Rachel Reese says a 0% rates rise should never be taken lightly.

“We know many people and businesses are suffering financially, and it is essential we assist our ratepayers to get through this challenging time. We have done a lot of work over the past years, to make sure Council finances are in good order and we are well placed to spearhead Nelson’s recovery from the pandemic.”

Mayor Reese says the report today is not a final position but a working model under development of what a COVID-19 recovery plan might look like.

“The ruler will be run over all costs to find savings, but we still want to be spending money where it will make a difference. This is not an austerity budget, but a balance between Council providing stimulus to the region and being realistic about the impacts of the COVID-19 crisis on revenue streams.”

Chief executive Pat Dougherty says Nelson City Council would not look to increase rates by a higher margin next year to offset the costs incurred this year.

“We will plan to recover from this over a three to four year period, ensuring that we can maintain services and push ahead with vital infrastructure projects we know will have a big impact on Nelson’s economy.”

Council also heard how $200k for the Nelson City Council Emergency Fund, would increase the amount of money available to support community organisations involved in the City’s response to COVID-19. To apply organisations must show they benefit the Nelson community, are not for profit, provide verified accounts demonstrating a budgetary shortfall or service demand due to COVID-19 and have already applied for any available Central Government support.

The Mayor and councillors voted to accept the report, and a final decision will be made during deliberations for the 2020/21 Annual Plan, following a period of community consultation ending 6 May.

Once further savings had been found and formalised any remaining shortfall would be covered by the Disaster Recovery Fund. Due to several emergencies in our region over the past few years, the fund is currently overdrawn at $649,000. Presently, this would mean an additional $3.9m would need to be borrowed from the fund in order to cover the 0% rates increase.

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