Councillors unanimously agreed the Annual Plan 2023-24 Budget proposal yesterday, which maintains current levels of service and continues a significant capital expenditure programme focused on Marlborough’s core infrastructure needs.
A number of small new expenditure items were supported, leaving an overall proposed rates increase of 7.8% for the year beginning 1 July 2023.
Mayor Nadine Taylor said it was a very unusual year.
“Like every council in New Zealand, we are facing much higher than normal levels of inflation, with the Consumer Price Index expected to peak at over 7% this year. Supply chain issues are driving up costs and affecting many parts of the New Zealand economy, including local government.”
“The two biggest drivers of Council’s rates increases are the Local Government Cost Index (LGCI) and capital expenditure. The LGCI is a price index that includes the cost of bitumen and water pipes - in other words the main goods and services that local government purchases. This year’s LGCI was forecast to be 2.4% but is actually running at 5.9%.”
“New Government requirements on councils and the increasing cost of servicing debt are also major factors.”
She said Council’s proposed Budget maintains its capital expenditure programme - primarily in roading, sewerage and water treatment - and no services had been cut from the next ten year period.
“However we have reviewed our user pays fees and we’ve reduced expenditure where possible. New revenue sources have also been identified and we’ve made good use of three of our reserves – the Infrastructure Upgrade, Depreciation and Covid-19 Rates Relief reserves.”
“In other words, we’ve worked hard to address this inflationary challenge and made every effort to bring down what would have been a much bigger rates increase - well above 10 per cent - without cutting public services.”
She said residents could also be reassured that despite the inflationary pressures, Council was continuing its investment in core services including roads and footpaths, flood protection, water supply, sewerage and environmental management.
“I’m very aware of the cost of living pressures on households and recognise that 7.8% is a relatively high rates increase. It’s not something that any mayor or councillor wants to propose but our budgets are under significant inflationary and interest cost pressure - and it’s the same for every council in the country.”
She said Council’s user pays fees - including resource consenting, environmental health and building control - would see increases.
“By increasing those fees we are reducing the impact on ratepayers next year by just over $1 million - we believe that that is a fairer way of spreading our costs. Most of our fees are at least 60 per cent funded by user pays and we want to maintain that proportionality.”
The 2023-24 Annual Plan Consultation Document will be adopted by the Council at its 6 April meeting. Public consultation will be open for submissions from 6 April to 8 May 2023. Public hearings are on 6, 7 and 8 June with the final Annual Plan 2023-24 adopted on 29 June.
