Annual Plan Consultation Document goes to Council on Thursday

Nelson City Council will consider proposals for a 7.2% average rate increase, in line with inflation, at a meeting on Thursday.

Nelson City Council will consider proposals for a 7.2% average rate increase, in line with inflation, at a meeting on Thursday. 

“The Annual Plan 2023/24 and budget process has been particularly tough this year with tens of millions in extra costs for repairs from last August’s storm, the highest inflation rate in 30 years and soaring interest costs,” says Nelson Mayor Nick Smith. 

“Council is very aware that households and businesses are currently under huge financial stress. Rates make up about 4% of household costs or an average $70 a week, compared with $700 per week in Government taxes, $550 a week in average rent or mortgage costs, $320 for food and about $100 per week each for transport, utilities and insurance. We are not big enough to counter the broader impacts of sharply rising costs. The best Council can do is not make the problem worse.” 

The Annual Plan Taskforce, led by Councillor Mel Courtney, has worked over the past three months to constrain the rate increase. Capital expenditure savings of $17.6 million have been made in 2023/24 by not proceeding with the new riverside library as per the previous council’s Long Term Plan. There has also been $4.1 million of general operations savings.  

“These savings have been offset by increases in costs for interest, staff, depreciation and August storm repairs,” Mayor Nick says. “We have proposed to spread the August storm repair costs out over 10 years. A shorter period would result in higher rate increases. A longer period increases the risk we will not have paid it off before the city faces another natural disaster. The August storm was the worst event since 1970 but we need to assume greater frequency with climate change.” 

Feedback is welcome on whether the 10-year proposed payback timeframe is reasonable, Mayor Nick says. 

“The proposed Annual Plan involves dozens of infrastructure projects being shuffled forward and back relative to Council’s Long Term Plan,” he says. “Some water projects are being deferred due to the storm damage requiring that others be given priority.” 

A total of $3 million is being brought forward for inner-city water infrastructure upgrades to enable Council to access $36 million of the Government’s Infrastructure Acceleration Fund. Another $600,000 is proposed for work to begin on the water, wastewater and transport upgrades to support the Maitahi housing development, subject to appeals. Other new projects worth $5 million include a central city play space and lighting for the Railway Reserve, to be funded by central Government over several years. 

“The proposed Annual Plan does include proposals to invest in Nelson’s beach and marine facilities,” Mayor Nick says. “Nelson needs to better capitalise on its beautiful beach and strong connections with the sea. We are increasing our spending at Tāhunanui Beach to improve maintenance and upkeep, and proposing a $100,000 investigation into new surf life-saving and sporting facilities. We are also increasing our investment in the marina facilities funded by the Marina account to expand the Travel Lift, consistent with the Nelson Marina Masterplan. This is about supporting growth in our marine industries."

Steps have been taken to ensure the 7.2% average rate increase is spread as evenly as possible.  

“Every ratepayer has a unique mix of fixed charges, different types of rates and land values. Our approach means the rate increase is shared more evenly than in previous years,” Mayor Nick says. 

“This proposed Annual Plan prioritises fixing the storm damage, improving core infrastructure and increasing Nelson’s resilience to climate change. It seeks to carefully balance the need to constrain increases in rates with maintaining Council services so as to ensure Nelson remains a great little city to live, work and do business. 

“We welcome submissions on our proposed changes either online or in writing.” 

The Mayor and councillors will also be at Nelson Market each Saturday in April with the new caravan to receive feedback. Council is due to make a final decision on the Annual Plan and rate increase in June.