Timaru District ratepayers face lower rates increases as plan consultation starts

Monday, 5 May 2025

Timaru’s council has gone out for public consultation on its annual plan, and as it runs a ruler over its spending, proposed overall rates increases may drop to 9%.

That is down from the 12% increase the council adopted in its Long-Term Plan (LTP) in 2024, and was due to the Timaru District Council’s attempt to “cut our cloth’’, its consultation document for the Annual Plan 2024/25 says.

Consultation opened on Thursday, and residents have three weeks to make submissions.

It comes during a period of belt tightening for the council which is in the process of a restructure proposal to cut 71 roles and create 19 new ones, a move expected to save between $3.5 million and $4m per year.

At the adoption of its LTP in 2024, there was a 15% overall rates increase in the first year and a 12% increase in each of the following two years.

However, in introducing the consultation document, mayor Nigel Bowen said the council had started to “tackle” its day-to-day expenses which outstripped the income generated through rates, fees and charges.

“While we could raise rates to a higher level to help close this gap, it is our view the community isn’t in the position to support the rates rises this would require,’’ he said.

“We’ve heard the community clearly that they feel we have to ‘cut our cloth’ so have been working hard to cut costs and increase efficiency to counter the increasing costs we’ve faced.’’

The council was required to adopt an annual plan for the following financial year annually, based on the LTP it adopted every three years.

One of the largest changes was the reduction of the proposed overall rates increase. It was important to note that this was only the overall percentage of rates being collected, and every individual property differed due to the services received, the type of property and its location.

He said council projects with large price tags, such as the Aorangi Stadium and Theatre Royal, had a “smaller effect” on rates bills as they were “paid off over a long period of time’’.

The Theatre Royal project had, at times, been contentious, with budget blowouts and proposals to build new elsewhere or scrap the project altogether.

It started as a $4.5m project in 2017, with cost estimates peaking at more than $57m before the project was halted and a scaled-back plan settled on.

Forecasts showed delivering its $78.8m capital work programme, funding the council’s operating costs and providing similar levels of service to the community would leave an operating deficit of $5.5m.

Adding in vested interests, it would give the council an overall surplus of $109,000 for 2025/26, the document said.

It was forecasting a net debt of $233m at the end of 2025/26 compared with the $314m in the LTP, some of this due to some of its big projects, which were debt funded, being behind schedule, it said.

The council was also proposing to increase its fees and charges.

“To lower the rates requirement for today’s ratepayers, we need to look at the smaller day-to-day costs,’’ Bowen said.

He said one way of doing that was looking at all surplus council-owned land and “putting everything we can up for sale’’.

Services the council used, such as printers, electricity and IT equipment, had been explored, as well as efforts to minimise the use of contractors and consultants, and bringing services in house.

Other options it could consider to cut costs included the reduction of roading spending by aligning its maintenance plan more closely with the Government’s priorities, and reducing funding for certain areas, primarily footpaths, bridges and garden beds.

It could also consider reducing the open times of facilities, shortening summer pool seasons, and reducing customer service hours.

The amount of funding the council gave out via grants, nearly $700,000 annually, was another option that could be explored.

While this would allow the council to reduce its operating expenses each year, it could impact on the viability of a number community events and organisations, it said.

Feedback would close at 5pm on May 23, and could be completed online at timaru.govt.nz/annualplan or by completing a hard copy submission at any council facility.

The annual plan would be adopted on June 24.