Key Issue 02

Issue 2 and description

What's the situation?

Affordability is a key factor in how Council plans for the future. We know there is only so much the community can afford, and the majority of this Long Term Plan process has been spent looking for savings and ways to reduce the rating increase.

Council, like any other organisation, has costs required for the “business as usual” mahi. This is called operational expenditure, or OPEX, and it is exactly what it sounds like – the cost of keeping the organisation (and all the services/ activities we deliver) operating.

There are ways to reduce these costs – but because they’re all related to delivering levels of service, a reduction in running costs means a reduction in levels of service.

What does levels of service mean?

Services are all the things Council does or provides – think of things like rubbish collection, maintaining the local public spaces like our parks and roadsides, our Resource Recycle Centres (“the dump”), Te Tāhuhu o Te Rangi, and our isite.

Levels of service is how much/how often/ how frequently that service is available – think of things like opening hours, waiting times, and how regularly the service is done (such as rubbish collection or mowing).Council has identified four areas to find savings (by reducing services) to lower the rates impact:

  • Events.
  • Engineering.
  • Parks and Reserves.
  • Toi EDA.

OPTION 1

Status quo. Continue the same level of service across all areas of the organisation.

How your general rates would change

The impact on your general rates under this option will be approximately as follows.

*These figures are based on low, medium, and upper valued properties in the district based on capital value and are approximate, average per annum amounts. The figures shown above are the estimations of the cost to each ratepayer of the proposed option for this activity/key issue.
Levels of Service

In this option, everything Council currently does will remain at the same levels of service. Unfortunately, this doesn’t mean the cost stays the same, as inflation affects councils the same way it affects households or other businesses. There are increased costs associated with delivering the same services at the same levels.

However, this option means all the services and activities of Council continue at the same level (as opposed to being reduced). Specifically, the areas identified in Option 2 will not be reduced. Those areas are:

  • Events.
  • Engineering.
  • Parks and Reserves.
  • Toi EDA.
Advantages
  • The levels of services in events, engineering, parks and reserves, and Toi EDA will stay the same.
  • There will be no impact on the community’s experience of services from Council.
Disadvantages or risks
  • General rates will go up by an average of 4% – an amount Council is aware the community are unlikely to be able to afford.
Debt

Neither Option 1 or Option 2 have an impact on Council’s debt.

preferred option

OPTION 2 - Council's preferred option

Reduce services in events, engineering, parks and reserves, and Toi EDA.

How your general rates would change

The impact on your general rates under this option will be approximately as follows.

*These figures are based on low, medium, and upper valued properties in the district based on capital value and are approximate, average per annum amounts. The figures shown above are the estimations of the cost to each ratepayer of the proposed option for this activity/key issue.
Levels of Service

This is Council’s preferred option. Council would reduce services in areas of the organisation that have been identified as able to provide some cost savings. Reducing the level of these services means the operational expenditure required to do them is lessened – this is what provides savings for the general rate in this option. The areas that would see reduced levels of service are:

  • Events.
  • Engineering.
  • Toi EDA.
  • Parks and Reserves.
Advantages

This approach contributes to keeping the general rate increase down.

Disadvantages or risks
  • The community’s experience of services from Council will be significantly impacted.
  • The Parks and Reserves reduction will see less litter collection.
  • The events reduction will see Council only able to guarantee the delivery of one major event per year. This will be dependent on the events team’s success each yearon external funding applications.
  • The engineering reduction will limit Council’s responsiveness to unexpected events, such as a pipe breaking suddenly. This might look like effected areas of the District being on a ‘boil water notice’ for a longer period of time than usual.
  • The Toi EDA reduction will see Council no longer be involved in the Economic Development planning and activities led or supported by Toi EDA. Ōpōtiki District’s capacity for economic growth may be affected by the lack of involvement in this strategic planning.
Debt

Neither Option 1 or Option 2 have an impact on Council’s debt.