Annual plan adopted
The Hawke’s Bay Regional Council’s Annual Plan 2020-21 has been adopted after consultation with the community, in particular the zero per cent increase in rates revenue and the set-up of a $1 million recovery fund.
The council wasn’t intending to consult on this Annual Plan, as a general continuance of the Long Term Plan, developed earlier but, of course, the drought and Covid19 presented a distinct set of challenges. These twin blows negatively affected budgets, forecasts, and employment in the region.
While the drought has broken and a reasonably kind winter with good growing conditions has buoyed farmers, there remains significant uncertainty about the instability of overseas markets affected by Covid-19.
It’s expected the council’s non-rate income – which generates over half of its revenue – will be significantly affected by the economic downturn, including the investment incomes used to offset rates.
As a council back in March, we quickly instructed staff to investigate a zero per cent rates increase to help the Hawke’s Bay recovery.
The combination of a forecast fall in investment income, and rates revenue, means we are now looking at up to a net $7.58 million revenue decline.
The need to borrow this forecast shortfall and to make it up in future years meant our decision to stick with the zero per cent rates increase was a 3-4 split between councillors. I was happy to stick with no increase as that is what we had indicated to the public and was supported by feedback.
With regards to rates, though, and looking particularly at where we have come from over the past three years, there will be some strong debate around the Long Term Plan. After quite substantial rates rises and a push from some councillors to continue to add new levels of service, I see an unsustainable level of rate increase well over and above inflation for years to come if we remain on this path.
The Long Term Plan process is due to start and I will be looking for feedback on these points in particular before we even get down to the strategy detail about implementation.
To keep the same levels of services will mean around a 10 per cent rate increase next year. And Cr Rick Barker’s proposed Climate Mitigation Unit will add a further 2.5 per cent increase to your rates.
This continual rate of increase is an unsustainable financial model.
What levels of service do you, the community of Central Hawke’s Bay, require? Is the regional council carrying out its core responsibilities well before adding so many new services? I look forward to your engagement over the next 12 months.