Revenue and Financing Policy - feedback sought

This policy sets out the various funding sources that Council uses to support operational and capital expenditure, for example, different types of rates, user pays, debt, etc. It shows how each activity of Council is funded. As a result of this analysis, Council is proposing some changes to how it uses revenue from its investments and to the way it funds some of its activities.

Proposed changes to the use of investment revenue

Under the 2021 policy, revenue from our investments is used to offset the general rate. The general rate is set based on capital value. This means that currently, ratepayers whose property has a higher capital value receive greater benefit from the revenue generated by Council’s investments.

Council is proposing to change the way it uses its revenue from investment activities from offsetting the general rate, to offsetting the uniform annual general charge (UAGC). Sources of revenue include dividends received from MWRC Holdings Ltd, interest on short term deposits, interest and dividends from the share portfolio and rate penalty charges. For 2024/25 the planned revenue to offset the UAGC is $5.15M (incl GST).

The UAGC is a fixed amount applied equally to all ratepayers across the region - in the 2023/24 year it was $56.00. The UAGC pays for a range of council services that provide region-wide benefit, for example, the governance and leadership functions of Council.

This change would mean that there would be a reduction in the UAGC charge by $43.27 (incl. GST) for every rating unit in the region. The UAGC would go from $56.00 in 2023/24, to $12.73 in 2024/25 (incl. GST). Because everyone pays the same amount for the UAGC, all ratepayers will benefit from the reduction equally, regardless of the value of their property. Because the general rate would no longer be offset by investment revenue, it will mean the general rate will effectively increase by an additional $5.38 (incl GST) per $100,000 of capital value. This means that, depending on your property value, you may pay less than before for your general rate contribution, and some properties will pay more – particularly if your property has a capital value of over $842,000.

Proposed changes to the way Horizons funds some of its activities

As part of the policy review process, Council is proposing a change to the way it funds some of its activities. One example is the proposal to update how we fund Horizons’ eleven drainage schemes. These drainage schemes help low-lying land be more productive and, in some cases, contribute to flood protection outcomes, by moving water that would otherwise pond and damage pasture or threaten surrounding homes back into the main waterways.

Currently, our drainage schemes are funded by applying 80% of the cost to rates targeted to properties within a scheme that benefit the most, and 20% to the general rate based on the understanding there is benefit to the region as a whole to have this productive land protected.

Council is proposing to change this funding model to 90% targeted rates and 10% general rates to better reflect the benefit properties within a drainage scheme receive. At a high level this would mean the portion all ratepayers contribute to a drainage scheme that is not on their property would be halved, where as those within a drainage scheme would be looking at around a 12.5% increase to their direct rate contribution, depending on inflation impacts.

There is an explanation of this change, and all others, within the reviewed policy draft in the Supporting Information. Please take a look at these and share your feedback with us.

Moutoa floodgates

Significance and Engagement Policy

The Significance and Engagement Policy provides guidance for Council and the community on the degree of signfincance of an issue or decision, and a framework for determining the appropriate level of stakeholder and community engagement on the issue.

Council reviewed the policy in 2023. As part of this review Council added a section: ‘When Council may choose not to consult’. This section has been added for transparency about when it can be impractical or unnecessary to seek community input to a decision. Some examples are:

  • Decisions made during a state of emergency
  • Decisions to act where it is necessary to comply with the law
  • Where the matter has already been addressed by Council’s policies or plans, which have previously been the subject of consultation.

Please see a copy of the Significance and Engagement Policy in the Supporting Information for further examples.

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