Council scraps rates rise, votes to borrow instead

1:42 pm on 1 May 2020

The West Coast Regional Council has ditched plans to put the rates up this year but has agreed to borrow up to $750,000 if it has to, to get through the Covid-19 downturn.

Mike Meehan

West Coast Regional Council CEO Mike Meehan (file photo) Photo: RNZ / Conan Young

At its meeting yesterday, held by video conference, councillors voted unanimously to borrow to cover any funding shortfall in 2020/21.

Chief executive Mike Meehan said the local government funding agency would lend at about 2 percent interest, and the council would use the money only if it has to.

"We now have the ability to borrow, but the focus will be on not having to - we will make savings wherever we can."

The council had been planning small increases this year in its uniform annual general charge and the general rate but those had now been set aside, corporate services manager Robert Mallinson said.

"Staff are committed to delivering a zero rate increase in the 20-21 annual plan ... council can balance the books with relatively modest borrowings," Mallinson said.

The council is budgeting for revenue of $14.5 million in total revenue for the coming year, and plans to spend $14.4m - leaving a small surplus of $107,588.

Less than $3.5m of the council revenue comes from general rates. Most of the rest is made up of earnings from targeted rates for flood protection and quarry revenues ($1.79m), pest control contracts ($4.9m), resource management fees ($1.9m), emergency management ($1.1m) and investment income ($1m).

The council's investment fund of about $12m took an $800,000 hit at the start of the Covid-19 crisis, but had since recovered about $250,000 of that, Meehan said.

The council uses interest from its investments to offset rates and provide a backstop for emergency work.

Mallinson said if it were not for the work the regional council was required to do on the one district plan, it could possibly get away with borrowing $500,000.

The council will not be taking the annual plan out to the public this year. Its budgets fit within the existing long-term plan plus it had recently consulted the community on the 'one district' plan, Mallinson said.

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