Council consults on bold proposals to reduce debt
Rise a ‘function of the broken local government funding system’
Community feedback is being sought after Kā piti Coast District Council released its Long-term Plan consultation document which includes a large “one-off” average rates increase in the first year.
The consultation document seeks feedback on three key proposals: options to tackle the $4.7 million three waters funding shortfall for 2024/25, proactively reducing council’s debt, and providing sustainable council housing for our older people.
People are also encouraged to provide feedback on a range of other items including updated policies and strategies, a climate action rate, and proposed fees and charges.
“This year, it’s really important that we hear back from people on our proposals, as we have some tough decisions to make,” Kāpiti Mayor Janet Holborow said.
She said the proposed average 17 per cent rates increase in the first year of the plan is proposed to get debt under control and set the district up for lower increases in future.
“This is a big one-off adjustment but with the intention of keeping annual rate rises in future years at around 7 per cent.
“The proposed rates rise is more than anyone wants to see but is similar to other councils across the country.
“Sadly, it’s also a function of the broken local government funding system.
“A significant proportion of our proposed rates increases in the first year is due to unavoidable costs such as inflation, interest, depreciation, and personnel.
“Like many councils across the country, we’re facing very high inflation in the cost of delivering our bigticket roading and water assets.
“We’re cutting our capital works programme by about a third across the first three years of the proposed plan but will remain flexible enough to bring projects forward if we need to as we are committed to maintaining our assets, not delaying work until they fail.”
She said a feature of the document was a plan to bring debt under control over the coming years “so we can cope if there’s a significant natural disaster”.
“Right now, we have net debt of $221 million and we are adding on average $19 million of new debt every year to pay for our capital works programme.
“If we don’t start repaying our debt, our interest repayments will be about $400,000 a week within 10 years.
That’s not the legacy we should leave our children.
“We’re asking for your feedback on which rates increase we should go with to strike the right balance between reducing debt and continuing to invest in our important assets.”
The Government’s repealing of the Affordable Waters legislation means council now has to fund $4.7m for next year’s three waters operating costs, which was expected to be transferred to a regional entity. This accounts for 5 per cent of the proposed 17 per cent rates increase.
“Our preferred option is to fund it through rates, as we are seeking actively reduce our debt, not add to it.”
The proposal to change the way council delivers housing follows review of the older persons’ housing last year.
“The cost of providing suitable council housing for older people in our district is increasing and, as councils are unable to access government funding to help cover the cost, we’ve been looking at how to extend and improve this service without the need for rates to pick up the shortfall.
“We’re asking our community to consider three options: transfer council’s older persons’ housing to a new community housing provider, or an
existing one, or keep it with council.
“Our preferred option is to transfer it to a new community housing provider that we would set up to be focused on the specific needs of Kāpiti’s older residents.”
Having already declared a climate emergency, council also wants the public’s feedback on a proposal to establish a new rate for specific climate action initiatives.
“This doesn’t put any additional cost on your rates bill this year. It simply transfers what we’re already spending on climate action from the general rates ‘bucket’.”
Read the Long-term Plan consultation document and supporting material then have your say at haveyoursay.kapiticoast.govt.nz/ LTP. Consultation closes at midnight Sunday, April 28.