Wellington Heading for its Lowest Rates Rise in Years

5 March 2010

Wellington City Council's Strategy and Policy Committee this week agreed to a range of proposed new initiatives and changes that, if approved, will result in an overall average real rates increase of 2.85 percent for the coming financial year - the lowest commercial and residential rise for seven years.

The proposed rates increase is well below the 5.88 percent overall average real rates increase forecast for the 2010/11 financial year (year two) in the Council's Long-Term Council Community Plan, which was agreed last year following extensive consultation.

The actual movement in the rates bill for an individual property will vary depending on the changes in capital value and on the effect of the rates differential between businesses and households but there will be differing impacts on different sectors. This means on average about a 5.5 percent real rates increase for the residential sector and a zero, or near zero, rise for the city's commercial sector.

The rates differential is the ratio that determines how much of the total rates take the commercial and residential sectors pay.

Mayor Kerry Prendergast says the Council's aim in preparing its draft plan for the coming financial year has been to maintain the breadth of services the Council provides at current levels, retain the city's vibrant character and keep the rates increase as low as possible.

"Although the recession may be officially over and there are signs that business confidence is starting to pick up, there is always a lag period. We are very conscious that there are businesses and people under considerable pressure who have yet to feel the effects of the improving economy.

"Our commercial ratepayers continue to heavily subsidise residential ratepayers by something like $33 million a year and we are committed to reducing that burden on them by continuing to gradually shift the rating differential to a fairer level."

The initiatives, which will be consulted on as part of this year's draft annual plan, include some new projects to help ensure the city is well prepared for next year's Rugby World Cup and able to maximise the benefits of being part of a tournament that will attract tens of thousands of visitors to the city and be seen by millions of people around the world.

Among these proposals are leasing the new Wharewaka, which is under construction on the waterfront, and setting it up as the base for the World Rugby Village and commissioning Weta Workshop to produce a large sculpture for Rugby World Cup. This would be located on the waterfront and later moved to a permanent site, providing a drawcard for visitors and helping to highlight Wellington's creative industries.

Other proposals include funding to help the city plan and prepare for the impacts of climate change - including rising sea level, increased erosion, slips and flooding - and funding associated with a number of proposed swimming pool upgrades.

The Council budgeted to spend $12.5 million on pool upgrades over the next 10 years as part of its long-term plan. It is looking at building a new teaching pool at Karori Pool for the Learn to Swim programme and a new hydrotherapy pool at the Wellington Regional Aquatic Centre (WRAC) in the coming year, and doing improvements over the next few years at Keith Spry, Tawa and Thorndon pools. The new hydrotherapy pool would allow the existing shared teaching and hydrotherapy pool to be used exclusively for Learn to Swim. About $2 million might also be used to encourage schools to keep or renew their existing pools if beneficial partnership arrangements can be agreed.

Decisions made yesterday will be debated and finalised for consultation at a Council meeting at 5.30pm on Wednesday 17 March.

Wellingtonians will get an opportunity to have their say on the draft plan from Friday 9 April to Monday 10 May. People with an interest will also be able to make submissions on the Council's draft Climate Change Action Plan, draft Community Facilities Policy and implementation plans and citywide liquor ban, which will all be open for feedback at about the same time. The draft Community Facilities Policy and implementation plans will detail proposed changes to the city's libraries, community centres and swimming pools over the next 10 years.

Other initiatives Wellingtonians will get to comment on include:

  • spending $250,000 a year for the next two years building about 50 new bus shelters, with the potential to extend the programme over 20 years
  • changes to the roading improvements planned for Adelaide Road - these are being proposed because we are unlikely to get as much New Zealand Transport Agency funding for this project as we had originally hoped
  • a feasibility study for a possible new library for Johnsonville that could form part of a community hub adjacent to the Keith Spry Pool
  • repiling and strengthening the Aro Valley Community Centre
  • replacing the existing public toilets in Courtenay Place to better meet the needs in this part of the city and spending more each year to keep central city streets cleaner.

Note:

The term "average real rates increase" takes into account the growth in the number of properties in the city.  As the number of properties grows, we don't simply collect more in rates. Instead, the amount that we have calculated we need to collect in rates to run the city for that particular year is divided by a larger number ­­- this generally helps to reduce the rates increase that individual property owners would otherwise face.