The Annual Plan is developed to address any variances from the Long Term Plan
Annual Plan 2022/2023
Every three years, we adopt a 10-year plan, which is referred to as the Long Term Plan (LTP). In the years between LTPs, an Annual Plan is developed to address any variances from the LTP, to confirm service levels and budgets for the year, and to set rates. Year two of our LTP 2021-2031 serves as the base for the Annual Plan 2022/2023. Southland District Council adopted its Annual Plan for 2022/2023 on 22 June 2022. Click here to read the 2022/2023 Annual Plan
See below for previous annual plans.
9 November 2022
Previous annual plans
All councils are required by legislation to prepare and adopt an Annual Plan for each financial year before the start of the new financial year. The Annual Plan is not audited.
Our Annual Plan for 2022/2023 did not have any significant or material variances from what was outlined in year two of the LTP 2021-2031. As a result, it was agreed by Council to not go out to the community for formal consultation. Instead, we provided information about what was proposed for the 2022/2023 Annual Plan in our publication First Edition and used social media and the SDC website to update the community on the Annual Plan process.
The average rate increase for 2022/2023 financial year has been set at 9.25%, compared with the 8.31% proposed in the LTP 2021-2031. This increases the proposed total rates collected in 2022/2023 by $0.5 million, from $58.7 million to $59.2 million. The main reason for the rates increase in the Annual Plan compared to year two of the LTP is an increase in the interest rates charged on loans associated with capital works projects. It is important to note that the figure of 9.25% is an average only.
In real terms, rate rises will vary across the district depending on a wide range of factors, including the location of the property, the services households receive and how their rating value has changed compared with other properties, from the recent revaluation.
In discussing the progress of the Annual Plan 2022/23 in March 2022, staff identified an average rate increase of 9.22%. As noted above this has now increased to an average rate of 9.25% as a result of a targeted rate set by the Northern Community Board local swimming pools.
The adopted Annual Plan includes the funding impact statement (rates section) for the 2022/2023 financial year; amendments to fees and charges; and bringing forward the use of $1 million from the strategic asset reserve to fund increases in the roading programme that match the increased Waka Kotahi NZ Transport Agency funding available.
To see what your actual rates increase will be, we encourage you to use our online rates calculator tool at the bottom of this page.
Rates rise compared to last year – in a nutshell
Our programme of work is the main driver, and that’s what people are paying for. For the 2022/2023 year we programmed $5 million more work than in the 2021/2022 year through our LTP.
Households in townships with water, sewerage and rubbish services will pay around $220 more for these services compared with last year, for increased maintenance and condition assessments, contract renewals and loans on capital works, as forecast through the LTP.
Residential homes that have had rating valuation increases above the average may also pay a greater share of rates that are set on capital value. Most of the changes in rates for 2022/2023 will affect the urban sector, which receives most of these services.
The largest rates increases will be in the urban residential, commercial and forestry sectors. To lessen the impact this year, we are using $2 million of our reserves to offset the rates increase. We have planned to gradually phase out the use of reserves to offset rates increases over the first three years of the LTP.
What are the main reasons for increased rates?
The cost of the forecasted work programmed to deliver capital projects, and to replace and maintain more of our infrastructure that we planned in the LTP (planned budget increases between Year 1 and year 2 of the LTP). Further to the capital projects and infrastructure, other costs include:
- the rising costs of increased maintenance and asset condition assessments
- meeting new statutory requirements (for example, biodiversity work), which require more resources
- higher contract costs to deliver levels of service – for example, sewerage/water contract renewals, and local contracts including mowing.
The rising interest rates we are paying on loans required to help pay for our forecasted works programme. Rating valuations that are above the district average – particularly for residential, commercial and industrial properties in urban areas as well as lifestyle and forestry properties.
Does my recent property revaluation affect my rates increase?
Yes, to varying extents. Changes to values spread rates amongst ratepayers in slightly different proportions. The new rating valuations have been prepared for 19,948 properties on behalf of Southland District Council by Quotable Value (QV). QV is New Zealand’s largest ratings valuation and property services provider.
Rating valuations are usually carried out on all New Zealand properties every three years to help local councils set rates for the following three-year period. They reflect the likely selling price of a property at the effective revaluation date, which was 1 August 2021, and do not include chattels.
The new valuations show the total rateable value for the district is now $25.5 billion, up 10.9%. Given the strong market since 2018, it’s likely that your capital value will have increased by a great deal, but it’s equally likely that everyone else’s has too. The effect that this will have on any rates change depends on how close to the average your increase was, relative to the rest of Southland.
If your capital value increased more than the average of 10.9%, you may see a relative increase in capital value-based rates. If your value increased less than the average, you may see a smaller increase in your overall rates.
Because residential, lifestyle and forestry capital values have increased at a faster rate than other sectors, these properties will likely pay a larger share of the total rates than at present.
What type of rates does SDC charge?
We have a number of different rates depending on where you live and the services you receive. Around half of our total rates are set as a fixed amount per property and the other half are set based according to a property’s capital value. Any changes to the budgets will affect all rates, whereas changes to rating value will only affect the rates based on capital value.
Rates that everyone pays (district rates)
- general rate, pays for a range of Council activities that have a benefit to the community generally. Around 45% of the general rate (known as the uniform annual general charge, or UAGC) is set as a fixed amount per property where all rating units pay an equal amount. The remainder is set according to the capital value of your property.
- targeted district-wide rates, which have a specific purpose. These include the regional heritage rate (to pay for a range of heritage activities in Southland) and stormwater rate (for the maintenance and replacement of stormwater infrastructure). These are set as a fixed amount. We also have a targeted roading rate with around 8% of this set as a fixed amount per property and the remainder set using capital value with a land use differential so that heavy traffic categories likely to have more impact on roads contribute more.
Rates that some people pay (targeted rates)
- service rates, which pay for services such as water supply, sewerage and wheelie bins. These are set as a fixed amount
- local rates, which are set by each of the nine community boards to pay for local activities such as maintenance of parks and reserves, street lights and footpaths. Although these are a fixed amount they can vary depending on the classification of urban, semi-urban and rural
- other targeted local rates, which are set as a fixed amount per property for a specific purpose – for example, hall and pool rates for the maintenance and operation of community halls and pools, the Stewart Island Electricity Supply Authority and the Te Anau Airport Manapouri.
What else is happening?
As Council was developing its Long Term Plan 2021-2031, we consulted with ratepayers on an increased road and bridge replacement programme to continue to provide existing levels of service across our roading network over the next 10 years.
The first three years of this works programme proposed approximately $100 million of work to be completed, with 52% funded by Waka Kotahi NZ Transport Agency and 48% funded from rates. Public submissions on this were fairly evenly split, so Council decided to go ahead with the proposed programme of work, given the vital nature of the network to our communities.
Council was later informed by Waka Kotahi that the full programme could not be funded in the first three years of the plan. As a result, some of this work was rescheduled to begin in 2024. However, in August 2021, Waka Kotahi advised Council that it was able to fund approximately $5 million more work for the first three years of the LTP than was budgeted for in in June. For year two (2022/2023), this effectively meant an additional $965,614 of work needed to be funded from rates.
To offset this increase, $1 million from the strategic asset reserve was moved from year four to year two. As a result, the additional Waka Kotahi funding is not considered to be a significant or material difference to the content of year two of the LTP.
Rates support - Can we help you?
We appreciate this is a challenging time financially for some ratepayers.
If you are going through financial hardship and you have any concerns about your rates bill please call our friendly rates team on 0800 732 732, or email: firstname.lastname@example.org We’ll be happy to help you.
If you are a low-income earner, receiving superannuation or living on a benefit, you could qualify for a Department of Internal Affairs rates rebate of up to $700. Please get in touch with us for more information or visit the Rates Rebate page.