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Message from the Mayor and Chief Executive
As we enter the third year of our 2021-2031 Ten Year Plan, we are all working within an ever-changing landscape. All of us are adapting and finding ways to move forward from the effects of the global pandemic and the ever-present impacts of climate change. Work continues upgrading underground networks, facilities and major amenities across the district. Acknowledging the ongoing disruption to our streets, thank you for your patience as we deliver on these major investments for our growing community.
Such significant improvements are key parts of improving capacity and resilience for the next 50 to 80 years but they do come with disruption. It’s encouraging to see family friendly, connected spaces emerging along Wānaka’s lakefront and Queenstown’s town centre, and know the less visible but much needed capacity in our underground water network continues to build.
The wellbeing of our communities continues to be a strong focus. For example, we are connecting with more people across the district thanks to the growing range of mental and physical wellbeing programmes on offer from our sport and recreation and library services. The Welcoming Communities programme, which aims to support newcomers to our district, has been well received as part of our focus on cultural diversity and we were proud to have recently opened Whare Mahana, Aotearoa New Zealand’s first Passive House Community Centre, in Luggate.
The harder story behind our work for the community features challenges many will be feeling too – whether that’s at home or work. Rising interest rates, high levels of inflation, staff shortages linked with accommodation challenges and supply issues are all factors affecting our budget with the cost of running any business increasing. Council is not immune to these pressures either. As an organisation we continue to strive for greater cost efficiencies while protecting community levels of service and ensuring that we balance the cost to the community as well as to individuals.
That commitment includes delivering quality assets and facing up to the challenges of a rapidly changing climate future in the way we build and deliver our services.
Given the stressors of this unsettled time, we have experienced an increase in poor behaviour towards Council employees. Our staff are people who are members of our Queenstown Lakes District community and genuinely committed to serving you. Whether it’s in person, online or on the phone – bullying and verbal abuse is never the answer and is never ok. We would like to remind people to respect our common values in caring for our district as they engage with us and other businesses or agencies. Thank you to the majority of you who do this and are community- minded in your interactions around Queenstown Lakes.
On top of these difficult conditions, Council has continued to face ongoing challenges with building defect and weather tightness claims (often referred to as “leaky buildings” which can affect some properties built between the late 1980s and mid-2000s). Under the current law Council is often the final party left to settle large and historic claims. Two recent claims have had a significant fiscal impact on the Council, which along with other market pressures has required Council to seriously review its capital works programme and service delivery. These settlements have led to higher borrowings for Council, and in turn higher interest costs.
As a consequence, this Annual Plan contains a reduced capital expenditure (capex) programme as Council puts in place the financial provision to meet these costs. This has largely led to the rescheduling of projects into later years and will be further scrutinised in the next Long Term Plan review commencing later in 2023.
Notwithstanding this, we will continue to prioritise a balanced portfolio that delivers on its level of service commitments and supports investment to meet growing demand.
One added uncertainty for Council is the ongoing Affordable (3Water) Waters Reform. For financial planning, all councils have been directed to assume the reforms will proceed.
We are working closely with the government’s national transition unit ahead of the proposed shift in management of our water services (drinking water, stormwater, wastewater) to the newly created regional entities. However, this is not expected to come into effect until 2025-2026. Council remains committed to Te Mana o Te Wai (the health and wellbeing of water), the need for safe drinking water, environmental protection, efficient service provisions, Māori participation in decision-making and environmentally friendly storm and wastewater systems. Balancing our immediate and ongoing needs within this context has also informed how we progress related capex projects over the next year. Following government direction on timing of the transition, we will need to continue this approach looking ahead at years 1 and 2 of the 2024-2034 Long Term Plan.
Turning our focus to rates, a 13.6% average rates increase was proposed for the 2023-2024 year, considerably higher than the 5.1% originally forecast for year three of the 2021-2031 Ten Year Plan. Changes to the budgets in response to community and internal submissions shifts this increase to an average increase of 14.2%.
We are very aware that economic conditions are tough and many are struggling with the cost of living. Council has taken a number of steps to prevent the increase from being higher, including reprioritisation of capital projects, increasing user fees, reducing funding of depreciation and increased assumption for annual growth in the rating base. Council is also expected to receive a higher than forecast dividend from Queenstown Airport which will help offset some increases to ratepayers.
We would like to thank everyone who took the time to engage with this important consultation, in particular all of you who made a submission and spoke at the hearing.
We would also like to acknowledge everyone who applied for community grants and funding and commend the significant number of groups and organisations out there doing such great work with and for our communities.
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