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Porirua City Sets Annual Plan

Porirua City Council has set its budget for the coming year, with an Annual Plan significantly impacted by Covid-19.

The Annual Plan 2020/21 was adopted by the Council at its meeting on 24 June, confirming a lower rate increase than previously agreed, to take into account the impact of the pandemic.

Mayor Anita Baker says this is going to be a big year for Porirua, facing challenges including ageing infrastructure, rapidly changing Government policies, climate change, and now the aftermath of Covid-19.

Council agreed in March to reduce the proposed rate increase from 6.75% to 4.98% as a direct response to the likely impacts of Covid-19 on our community, Mayor Baker says.

The 4.98% is an average across all ratepayers, The actual increase for each ratepayer will depend on how their property values have changed and whether they’re rural, residential, or commercial. All ratepayers will receive their new rates invoice in mid-July.

The change to 4.98% leaves a shortfall in the funds needed to keep the city running.

"The unexpected pandemic disrupted our plans for the year, and because we couldn’t provide many of our services during Alert Level 4 and 3, our revenue took a significant hit," Mayor Baker says.

During this time we still had to maintain all our essential services like water, sewerage and rubbish collection, and we were in emergency response mode - helping those in need by distributing food and welfare packages, securing emergency accommodation and keeping our community informed.

Chief Executive Wendy Walker says reduced income is expected to continue for at least the rest of 2020, and the loss of revenue is estimated at $1.4 million.

"We are not increasing rates to make up this shortfall and instead we will borrow to fund this operating deficit."

While this is critical to keep the city running, it’s not sustainable long-term and will of course need to be paid back, Ms Walker says.

"We have an obligation to maintain a balanced budget each year and consider our future generations when making decisions today. That said we must be agile in extraordinary circumstances. This is that time."

In the short term, Council is trimming some activities, including only recruiting for critical vacancies, cutting back contractors and consultants and reducing our training budget. We also plan to reduce our capital expenditure by 25% (about $8.5m), which will save on both depreciation and interest costs and help minimise the operating deficit.

Mayor Baker says all residents and commercial ratepayers have had the option of rates deferral and we’ve waived fees and charges for the roughly 70 sport groups with a permanent presence at our parks and sports facilities.

"But we are heading into some uncertain times and the impacts are going to be felt for some time yet.

"Next year we will be resetting the budget as we prepare our Long-term Plan. There will be plenty of opportunities for you to have input into any changes to our services and budgets in the months ahead.

"In the meantime, we will continue to work hard for the city to get through this difficult time."

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