Annual Plan adopted as Council seeks to cushion impact of cost-of-living crisis

Nelson City Council’s Annual Plan 2023/24 has been adopted by elected members at a Council meeting held on Thursday 22 June.

Nelson Mayor Nick Smith says Council made some sensible tweaks and managed to keep the lid on the rates increase at a time of economic uncertainty. 

“Given that inflation is currently so high, it was prudent for us to make sure the average 7.2% rates increase was no more than the inflation rate at the time this plan was written. Nelson’s rate increase is also less than most other Councils throughout New Zealand. 

“We were very mindful of how the cost-of-living crisis is affecting our community. Food is up 12%. The average Nelson mortgage interest cost is up $350 per week. Nelson rents are up an average $50 per week. Rates make up only 4% of household costs but by keeping the rate increase to no more than inflation, we are not making the problem worse. I think what we have now strikes a balance between the need for Nelson to recover and grow while considering people’s financial situations.” 

The 7.2% figure is the increase in the total amount of rates that Council will receive. The actual increase experienced by individuals and businesses will vary depending on the various elements that make up a rates bill. For residential ratepayers, the rate increase is between 7.4% and 8.3%, this is largely due to the targeted rates for these properties increasing, especially the stormwater/flood protection charge which is increasing by 22.6% and the wastewater charge by 9.7%.  Properties that don’t receive stormwater/flood protection or wastewater charges such as rural properties and empty residential sections will have an average increase in rates of less than 7.2%. Some commercial properties will also see an increase of less than 7.2%.  

Among the key changes in this year’s Annual Plan was the impact of the severe weather event in August 2022. The cost of this is partially met by central government and insurance, but it has also added to the costs faced by Council. 

“The cost of continuing with the August 2022 severe weather event recovery to ratepayers in 2023/24 is estimated to be $19.6 million, including $8 million approved by Council in May for slip remediation work. The total estimated cost for recovery is $77.1 million with 30% expected to be covered by insurance and central government contributions. The work includes fixing roads and footpaths, slips, three waters reticulation, tracks and walkways, and parks throughout our region, a job that we have decided to complete over six years and pay for over 10 years to minimise the effect on rates. 

“This struck a balance between ensuring the work is done to the best possible standard, in a timely manner, while being paid off relatively quickly compared with other capital projects.” 

One of the key changes to the proposed Annual Plan was a decision to increase funding to community groups. Savings were found by not increasing the budgets of a variety of groups by the rate of inflation. 

“After deliberating on the public submissions on 25 May, we opted to provide an increase in funding for community groups working with Nelson’s most vulnerable. This reflects the economic forecasts for tough times ahead.” 

Other key elements of the Annual Plan that have been approved include: 

• Bringing forward funding to get started on engagement and design work for the Infrastructure Acceleration Fund project 
• Removing funding for the proposed new library project from the Annual Plan, but keeping some funding so we can reassess our options 
• Infrastructure work required to enable the Maitahi Bayview development to go ahead, pending the decision of the Environment Court 

Bridge Street Linear Active Transport Corridor 

A total of $3m has been brought forward for feasibility work, design and community engagement for this project that will accelerate the provision of infrastructure capacity to support housing and transform Nelson’s City Centre into a place where people live, as well as work and play.  

“By upgrading Three Waters infrastructure and creating the Bridge Street Active Transport Corridor, we lay the groundwork for developers to create up to 1000 homes. This is anticipated to breathe new life and confidence into Nelson and build resilience to severe weather events, with positive knock-on effects for our retail and hospitality industries,” says Group Manager Infrastructure Alec Louverdis.  

“We want to create a more people-focused city and space for all Nelsonians to enjoy. Strong community/business engagement is absolutely vital to this project, and we will now be able to start the conversation with our community as we work through the design stages, as well as working closely with property owners and businesses on Bridge Street. Construction is due to start in 2025, so now is the time for us to work together to make sure this change to our city centre is a project our whole community can get behind.” 

The project as a whole will receive $36m of funding from central government over the next 10 years. 

Reduction in spending on a new library 

The Annual Plan removes $17.6m from the 2023/24 year, which was set aside to progress work on the new library development. Instead, $200,000 has been allocated for an investigation into a new location for a new community hub and library, and more engagement with the community as to what people would like this facility to offer. 

“Our work on the Elma Turner Library has bought us some time,” says Mayor Nick, “but it has made it clear that a new building will be needed. 

“What we need to do now is look at a more affordable project, in a central location, that will offer Nelsonians a top-class facility. Places like Blenheim have successfully built modern libraries that serve their communities well, and that’s the direction I’d like to see Nelson take as well.” 

Maitahi Bayview Development (Maitai Valley) 

Council has set aside $606,000 for preliminary three waters upgrades and improved transport connections for the Maitahi Bayview Development.  

“This money will only be spent if the Environment Court allows the development to proceed,” says Mayor Nick. “If the development does get the go-ahead, Council needs to have this funding in place to move forward with the work. To not have it in place would be an unreasonable delay.” 

This cost will be split between Council and the developer at a rate that will be determined at a later date.