FAQs

Inflation, rising interest rates, and escalating costs for essential needs like insurance and asset maintenance, leave Council trying to balance the community’s aspirations with a financial reality that is challenging.

To put this in perspective Council’s fixed costs for interest, depreciation, insurance and utilities alone account for 14% of the proposed average 17.4% rates increase.

We have re-evaluated everything from scratch, scrutinising our operational costs line by line and exploring every opportunity to make significant reductions. This includes a careful review of our fees and charges to ensure a balance between user-specific service payments and the general rate funding.

The average rates increase of 17.4% we are proposing is much greater than we’ve seen in the past but is required to ensure our borrowings do not exceed our limits, we can continue to deliver Three Waters services and we are financially sustainable into the future. Some properties may see increases above 20% or less than 17.4%. The impact of the proposed average rates increase will vary between households, depending on where you live, the value of your property and whether or not you receive water and wastewater services.

Yes. Growth in the number of rateable properties increases the number in which the rates requirement is shared. This is included in our calculations and reduces the overall % increase in rates. They also contribute a significant amount towards the cost of infrastructure.

Council charges Development Contributions (DCs) so new properties pay for the infrastructure that Council has to build to meet the additional demand they create. However, DCs can only be charged for the extra demand, not any improvement to the level of service provided by Council. Any part of a project that improves the level of service for the wider community, such as improving water supply to reduce water restrictions, must be paid for through borrowings, which the new properties will also contribute to paying back.

As part of our funding policies for growth, we are making sure that new developments (new houses) pay for the new infrastructure required to service them.

For example a new property in Levin will need to contribute approximately $28,000 towards the cost of infrastructure investment.

The rating act is a blunt tool that sets out the different ways Councils can charge rates. While basing rates on income may seem like a fair way of making rates affordable, we are not allowed to charge rates using this method. Council also does not collect information on individuals or a household's incomes.

As a form of taxation, Rates help pay for services and facilities for the community that are either essential (like water and wastewater management) or provide a community good – the things that make our district a more desirable place to live.

There are certain rates which follow a user pays as general principle more closely (although not directly), such as Water and Sewer, where only properties that are either connected or available to connect to the network are charged.  

Many of our services however could simply not operate under a 100% user pays model.  For example, to recover the costs of our pools or libraries under a full user pays system would require fees to be set at a level that would result in many families not being able to use the service. Council provides services that are of value to our community but it takes the whole community to make them a reality.

For rates such as Water, Wastewater and Stormwater rural ratepayers do not pay if they are outside of the serviced area. 

Under the proposed changes to Solid Waste rating, rural ratepayers will pay towards services such as landfill remediation, waste transfer stations and waste minimisation, but only pay for kerbside recycling services if they are within the agreed service area.

• Liquor, health and safety licensing, building consents, resource consents, animal control, parking enforcement, and general regulatory services;  
• Community facilities and services, except Library and Community Centres and Aquatic Centres (passive reserves, street beautification, sports grounds, cemeteries, halls and community buildings, and public toilets);  
• Community Support: emergency management, community engagement, visitor information, and economic development;  
• Solid Waste: transfer stations and recycling centres 
• Library and Community Centres 
• Roading: local roads, maintenance, marking 
• Aquatic Centres (Swimming Pools) 
• Governance and Community Leadership for the activities of Strategic Planning and District Plan development only;  
• Property: Commercial property, general property, Council buildings; and  
• Treasury activities (investment and borrowing activities). 
• Representation & Community Leadership: Council and committees, consultation, advocacy, and elections.

Land value is the essentially the price that the land would likely sell for at the time of revaluation, I.E not including any buildings or other improvements made to the site. Rating Valuations in Horowhenua are currently as at 1 August 2022.

Capital value is the price a property would likely sell for at the time or revaluation including any buildings or other improvements. Note it does not include chattels, stock, crops, machinery or trees.

Assets such as bridges, roads, parks, and water treatment plants wear out over time and are eventually renewed or replaced. Depreciation is the method used to account for the cost of these assets over the asset’s lives. Funding this depreciation through rates each year means that ratepayers now (and in the future) pay their share of the use of assets.

Cutting funding for depreciation will significantly lessen the sting of the rates increase. However, such a decision will have longer-term impacts on our District.

• Non funding or reduced funding of depreciation now will incur a subsequent depreciation funding deficit. This deficit will have to be reinstated over the following years, to ensure ratepayers, now and in the future, pay for their share of the assets use. The smoothing of this funding will lead to an additional increase on rates over the next few years.
• If we reduce depreciation funding too much, this will add additional cost to future ratepayers and/or slow the rate at which infrastructure can be improved or replaced in the future. 

Council does not currently own or manage any social housing across the district. At the end of 2023 the emergency housing register for the district held 174 requests for housing. 

The intent of the Housing Action plan is to focus on enabling improved processes through council, improving efficiency to reduce time and cost for consenting activities. 

At the same time Council continues to engage with developers, government departments and the wider community around potential social and affordable housing opportunities. Our focus is on connecting those contributors in the community who are keen to help with delivering affordable housing opportunities, for those most in need.  

Businesses participating in the New Zealand Emission Trading Scheme (NZ ETS) must give the government one NZU for each tonne of emissions they produce. Carbon credits: these are financial instruments – things that can be bought and sold – that represent a unit of carbon dioxide equivalent or CO2e. One carbon credit is equal to 1 tonne of CO2e.

Selling our carbon credits means that if we do need them in the near future, we need to be buying them. Of the 72 hectares of land at Levin Landfill, 18 hectares (one quarter of the land), is landfill and the rest is covered in pine trees. The trees currently there were planted 20 years ago. The trees will provide us with some revenue thorough carbon credits and tree harvesting.

Inflation forms part of the rates increase we are facing. For example, If inflation resulted in a cost increase of $500,000, this means Council needs to be collecting from the ratepayers through rates revenue an additional $500,000. This equates to approximately 0.95% of rates increase.

Council’s utilities (including gas and water use) are budgeted at $1.9m for 2024/25. This year’s utilities spending is forecasted at $1.6m - a 18.75% increase.

Council uses borrowings (debt) to pay for new infrastructure for growth and increases to levels of service initially. This ensures future generations (including new properties) pay their share of the cost of the new assets which they will use. The renewal or replacement capital programme is paid for with funding we have collected from rates over the life of the assets (depreciation funding) and from subsidies which are mostly from Waka Kotahi. All of the growth-related capital expenditure is planned to be funded from development contributions and $110m is assumed to be received from development contributions over the 20 years of the LTP.