Council Agrees on Annual Plan and 3.24% Rates Increase

25 June 2010

Wellington City Council today (25.06.10) approved its annual plan for the 2010/11 financial year, confirming services and a programme of work that will allow the city to respond to climate change, prepare for Rugby World Cup 2011 and take care of the city's infrastructure and facilities.

It will result in an average rates increase of 3.24 percent - the lowest overall increase for seven years.

Before finally approving the plan today the Council agreed to provide a grant of $200,000 to the Wellington Tenths Trust to help fund the Wharewaka under construction on Wellington's waterfront. This brings the Council's contribution to this $12.5 million project, to $1 million. The Council previously provided $800,000, which was used to fund design work. The additional $200,000 will help the Trust meet a funding gap of $580,000.

The proposed rates increase is well below the 5.88 percent overall average rates increase forecast for the 2010/11 financial year (year two) in the Council's Long-Term Council Community Plan. It does not include the GST rise that will apply from 1 October.

The amount for individual properties will vary depending on shifts in valuations and the impact of a change in the share of rates that the commercial sector has to pay. On average, the residential sector will have a 5.58 percent average rates increase while the impact on the city's commercial sector will be near zero.

Despite the lower increase the commercial sector will still pay more rates than a residential ratepayer on a property of equal value. This is mainly because of the 'differential' - a part of the Council's rating policy - that sees the commercial ratepayers pay 3.1 times more on a property of equal value. The lower increase is because the differential is being reduced to a fairer level.  Last year the commercial sector paid 3.45 times more. 

Mayor Kerry Prendergast says many businesses and householders have yet to feel the effects of the improving economy so the Council worked hard to keep the rates rise as low as possible.

"At the same time, this plan means we can continue to provide existing high-quality services at current levels, make the most of the Rugby World Cup and invest in the city's future.

"We'll be taking the next steps to help the city reduce greenhouse gas emissions and prepare for the impact of changing weather and tidal patterns, including an electric vehicle pilot and programme to assist businesses to reduce their carbon footprint," she says. "We have also agreed to take a new approach to investing in the city's community facilities, which as a first step, will involve improvements to several of the city's swimming pools.

"We appreciated hearing from everyone who made written or oral submissions and that feedback did influence the decisions and changes we made."

The Council owns and manages over $6 billion of assets on behalf of Wellingtonians, which all have to be maintained in good condition.

The income the Council receives from general rates and user charges pays for day-to-day operations and services, from collecting rubbish and maintaining some 670 kilometres of roads, to issuing building consents, running our recreational facilities and maintaining the city's parks and gardens.

General rates fund about 35 percent of what the Council does. A further 28 percent comes from targeted rates, including a special rate on the commercial/industrial sector which funds all of the Council's events support. Another targeted rate, the downtown levy on central city commercial properties, funds a range of things including tourism promotion. User charges fund 22 percent of Council operations while the remainder comes from ground and commercial leases, dividends and other sources.

Rates, Council fees and most user charges will be adjusted from 1 October to reflect the increase in GST. The exceptions are metered parking charges, which will remain at a maximum of $4 an hour, and most library fees. Only two library fees will go up from 1 October to compensate for additional GST costs - adult overdue charges will rise from 60 to 80 cents a day and children's DVD rentals will go up from 50 cents to 80 cents.