Hutt City Council acts to cut proposed 7.9% rates increase

In March Councillors agreed to go out to the public to consult on a proposed 7.9 per cent rates increase in order to invest in key infrastructure, and put the city on a more secure and sustainable financial footing going forward.

Lower Hutt Mayor Campbell Barry says action has been taken to cut back the draft budget and proposed rates increase in light of the current and forecast economic impact of COVID-19 and the need for Council to tighten its belt – just as people and businesses across Lower Hutt are doing. 

“These are tough and challenging times for people across our city and it is not tenable for our council to proceed with business as usual.  We need to be doing all we can to alleviate financial pressures on people at this time, which is why we are now proposing a significantly reduced rates increase,” Campbell Barry says.

“Council has asked for a budget to be prepared on the basis of an average rates increase of 3.8 per cent. This covers the increased cost of delivering existing services and would allow us to proceed with some key investments including monitoring of our water infrastructure, and seismic strengthening required of community facilities like the War Memorial Library.”

“What is clear is that our Council will still have to front up to many of the big challenges our city faces – including addressing the housing crisis, easing congestion on our roads, modernising our rubbish and recycling service, rebuilding Naenae Pool, and ensuring our basic infrastructure is fit for the future. These are still key priorities and we will continue to progress them in the coming months.”

Campbell Barry says the most effective way to provide relief to ratepayers would be for central government to take nationwide action to extend the current rates rebate scheme, and defer the impact of this year’s capital revaluations. 

“As Mayor, I’ve made direct representations to Government for it to extend the eligibility of the current rates rebate scheme, and defer the application of the new capital revaluations until the 2021/2022 financial year. In Lower Hutt for example, we know that even with a zero per cent rates increase, some of our suburbs would still face a 10 per cent rates increase due to the capital value of properties going up.”

At the meeting, Councillors were advised a zero rates increase would result in significant service reductions, including the possible closure of community facilities. However Council officers will provide more information on what a zero rates rise could look like so Councillors are able to consider this in the course of the Annual Plan process.

Hutt City Council Chief Executive Jo Miller says an emergency budget was being drafted in the face of great uncertainty for the community and reduced revenue for Council due to closed facilities and a dramatic reduction in activity and in the economy.

“The financial impact of COVID-19 on the 2019/20 results is not yet known, but we will have a larger operating deficit than previously forecast. We have cut back on expenditure already and I have contacted unions and advised of my intention to negotiate a pay freeze until July 2021 which follows my personal decision to take a 10 per cent pay cut. I’m also bringing forward planned work on a line by line review of our budget and looking at how Council can reconfigure services and gain greater efficiencies,” says Jo Miller.

Today Council also approved a new rates postponement policy, as well as criteria for its $100,000 Community Resilience Fund. The new rates postponement policy extends the current policy to include households, and small/medium sized businesses impacted by COVID-19 and who are experiencing financial hardship. These decisions follow immediate measures Council adopted last month.

ENDS

Council’s Response Plan to COVID-19

Council has responded to Covid-19 with a range of initiatives to support the Lower Hutt community. The environment is changing rapidly and there is a need to continue to be responsive and provide immediate benefits that reduce financial stress and provide social support to our residents. There are several aspects to Hutt City Council’s COVID-19 Response Plan. These include:

• Rates and Charges
• Support to Businesses
• Focus on Welfare
• Other initiatives

For Hutt City Council specific information visit: huttcity.govt.nz/covid19