What's different?

In order to keep the rates increase as low as possible, our ambitious capital expenditure (capex) programme required some pragmatic decision making around when and how we progress infrastructure projects to both maintain current levels of service and grow to meet the increasing demand of our communities.

During the consultation process on this Annual Plan, Council sought feedback on a proposed reprioritised capex programme. Almost half (47%) of submissions either supported or had a neutral stance on the proposed approach, while 53% were opposed. Council has considered this feedback alongside a range of other factors such as affordability and impact on rates, and chosen to move ahead with the reprioritised programme. We continue to focus on maintaining our networks and services, creating capacity to improve service levels and respond to growth, and building assets that support how communities want to live, work and play.

However, a number of projects have been reprogrammed to the 2024-2025 year and beyond. These include the delivery of the Wānaka water treatment plant and the Two Mile water treatment plant.

Meanwhile capex spend has been uplifted by projects in the transport area, including improvements to the active travel route connecting Arthurs Point and Queenstown ($7.3M, expected to be 97% funded by the Government Transport Choices package). There is also a $25.7M increase to the Queenstown Town Centre Arterials project which represents deferrals from earlier years (this project is 56% funded by Crown Infrastructure Partners). This brings the capex programme totalto $201.6M, which is around $33.4M more than the original year three programme included in the 2021-2031 Ten Year Plan.

We provide a range of ‘user pays’ services throughout the district. Generally, we will look to use fees and charges to recover private benefit costs of a particular activity. The Revenue and Financing Policy1 determines the target for the proportion of private benefit to be recovered by fees and charges for each activity.

Council is also able to set fees and charges payable by applicants for the processing of applications and for any performance of any other function or service delivered under the Resource Management Act 1991, Building Act 2004, and Local Government Act 2002.

In reviewing progress on the 2021-2031 Ten Year Plan and compiling budgets for this third year of that plan, a range of fees and charges would not comply with the Revenue and Financing Policy. As part of the consultation process on this plan, Council asked for feedback on proposed increases and changes to fees as a way to help offset further rates increases. The majority of feedback received was either supportive or neutral and Council has chosen to proceed with the changes as proposed, with the exception of fees to hire swim lanes, which were amended slightly as a result of community feedback. Fees and charges will change for the following areas:

• Planning & Development services (building consents, resource consents, and resource management engineering, including administration support) - increases in hourly rates and Council charges will help ensure Council can recover the reasonable costs incurred to provide the service.

• Waste services at transfer stations – increases to user fees to offset operational costs which include purchasing Emissions Trading Scheme credits (sometimes called “carbon credits”).

• Sport & Recreation facilities – a new price category for tertiary students at pool facilities, revised price increases, alongside some price decreases, to make the facilities more accessible to a greater number of people in the community.

• Community facilities – alongside some price increases, the structure of community facility hire fees has been simplified, removing peak to off-peak

• Animal control – increases to dog registration fees and animal control charges to reflect the cost to deliver the service. Some of the fee changes are specifically applied to areas that create increased demand on the service, for example dangerous dogs.

• Car parking – increases to parking fees within the Queenstown Town Centre to cover the cost of providing the service and support funding towards subsidising the Public Transport service

The changes to user fees will contribute additional revenue to Council’s budget.

The approved price changes result in a total of $1.9M in additional revenue which directly offsets a rates increase. If the fees were not increased, it would result in a further 1.76% increase on rates.

Rates impact – median values

The average rates increase of 14.2% after growth does not result in a uniform increase across all rate types and locations. For residential properties, the nominal value of the increase ranges from $353 in Kingston to $492 in Arrowtown. The differences relate to the services received (some townships do not have reticulated water and wastewater), and the capital values. Most median value residential properties will be in the $452 to $483 range (13.18% to 15.61%). For example, the percentage increase for Glenorchy is higher because of the lower base (no wastewater service) and is exacerbated by higher water rates (already subsidised). The percentage increase for Kingston is also higher because of the lower base (no water or wastewater services) and the nominal increase at $353 is lower than other areas.

Rates impact – higher values

The impact of the higher differentials for accommodation is apparent in this set of examples. The percentage increases for these properties are lower because they start on a higher base than other property types. For residential the nominal value of the increase ranges from $395 in Kingston to $1,022 in Queenstown. Most higher value rural properties will be in the $755 to $2,810 range (13.10% to 21.65%). The differences relate to the services received (most rural properties do not have reticulated water and wastewater) and the capital values.

Rates impact – lower values

The impact of the differentials is less apparent in this set of examples. The nominal increases for these properties are lower and more tightly aligned (range $318 to $532) because they start on a lower base than other property types.