Nelson City Council to consider a 0% rates rise at next Council meeting

Nelson City Council to consider a 0% rates rise at next Council meeting

Media Release

8 APRIL 2020

With the COVID-19 shutdown having a significant effect on our region’s economy, Nelson City Council has decided to take a new approach to its Draft Annual Plan, including a proposal for a 0% rate rise.

The following points will be discussed as part of a financial package to help Nelsonians recover from the pandemic at an Emergency Meeting of Council held tomorrow (Thursday, 9 April).
• The 3.7% increase proposed in the 2020/21 Draft Annual Plan Consultation Document is not viable in the current financial climate.
• Council officers are now working on providing Council with alternative scenarios, including a 0% rise and an increase in line with the Consumer Price Index (CPI) of 1.9%.
Nelson Mayor Rachel Reese says it is clear that the initial Draft Annual Plan will not work for the social and economic situation we are in.

“I know how hard the next year will be for many in Nelson. If Council is to assist in helping residents and businesses recover, we need to take the Draft Annual Plan in a new direction.”

The 2020/21 Draft Annual Plan Consultation Document proposed an average rate increase of 3.7%, but this was written in a very different economic landscape. The COVID-19 shutdown has changed things considerably, with many people on reduced wages or facing unemployment.

“In the few short weeks since the Draft Annual Plan Consultation Document was released the world has changed and we need to reconsider our plans for the next 12 months and how we as a Council can help get Nelson back on track at a time when many people are facing an uncertain economic future.”

Freezing rates at their current level would represent an almost $3m reduction in the proposed budget over the next financial year and with impacts on revenue likely, due to the economic downturn, Mayor Reese says if this path is adopted by the Council then tough calls would need to be made regarding priorities.

“The work council undertakes acts as a powerful stimulus for our local economy, so we need to think carefully about what changes to the rate increase will mean for Nelson. With Council’s other revenue streams also impacted by the lockdown, we need some smart thinking about where and how we allocate our spending over the next year.”

While Nelson City Council has a high credit rating and relatively low debt, achieving a zero rate rise will require some major adjustments. This is likely to include use of the disaster recovery fund and a pay freeze for all Council staff.

Mayor Reese said Council was well prepared to support Nelson through this crisis.

“I want to reassure you that we have kept council finances in good shape so we have the ability to support our community through this emergency. We have kept our debt level low and we have reserves to draw on.”

The public are now being asked to give their views on the rate rise as part of the Draft Annual Plan Consultation process, which will be extended by several weeks to allow more time for feedback.

Councillors will be also asked to consider further rates relief possibilities, including a rates remission scheme.

Various options are already available to ratepayers that are struggling to pay, with Council officers working with individuals on tailor made payment plans to suit their situation. Officers will remit rates penalties for the 2019/20 fourth rates instalment on compassionate grounds or when a payment plan is put in place.

Contact:
media@ncc.govt.nz