Greater Wellington Regional Council says the expectation for action against climate change and other cost pressures will likely lead to a rates increase of more than 13 per cent next year.
It comes as Wellington City Council is working out how to reduce a forecast 23 per cent rates hike.
Both councils completely overhauled their current budgets to keep increases down in the height of Covid-19.
Greater Wellington Regional Council chairman Daran Ponter said no council wanted to be increasing rates.
“Most councils across the country significantly shaved their rates last year, but we can’t continue to do that because that will affect the services we provide.”
The regional council only pushed up rates by 3 per cent due to Covid-19 and the forecast rates hike next year is partly to compensate for that.
In comparison, rates were increased by 5.9 per cent in 2019.
Next year’s increase also takes into consideration the council’s purchase of almost 100 electric buses, as well as accommodating new rest and meal break legislation for drivers.
The council is also gearing up for changes to the Resource Management Act and work on water quality.
Ponter said he was keenly aware of big expectations from the community for action against climate change and the role the council plays as a front-line agency in sustainable environmental management and responding to the climate emergency.
But the issue that has the biggest potential to affect rates increases is the most difficult to predict.
The regional council looks after public transport, which has been heavily impacted by Covid-19.
Revenue has taken a hit because of lower patronage. To date, NZTA has picked up the tab and funded the shortfall.
But the regional council is unsure how long this commitment will last for and is making no assumptions.
Current patronage across the network is at about 83 per cent of normal. It’s hoped this will continue to track upwards to more like 90 per cent next year.
Even then, the council would still be up to $10 million short of revenue each year.
Ponter said the general rule of thumb was that every $1 million translated to about a 1 per cent increase on rates.
“Either rates would have to go up or the fares, but I’m loath to put the fares up at a time when we’re trying to encourage people to get out of cars.”
Ponter said decreasing service levels was also a downward spiral for mode shift.
The rates increase has nothing to do with deferred maintenance like what other councils were facing with their water infrastructure, Ponter said.
“There are also no one-off big-budget type things driving this, it’s not like we’ve suddenly decided to build a convention centre.”
Ponter confirmed the council was looking at a likely average rates increase of more than 13 per cent for 2021/22.
Public consultation on the 2021-31 Long-Term Plan is expected in March next year.
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