It was a case of good news and bad news as the Queenstown Lakes District Council (QLDC) set its annual rates yesterday (Thursday September 2). 

The bad news is, once again, rates are set to increase; the good news is that the increase will be smaller than originally indicated when the council’s 10-year plan was approved at the end of June. 

At an extraordinary council meeting yesterday, councillors unanimously agreed to reduce the previously indicated rates increase across the district. 

In June, councillors approved an average net rates increase of 5.45 per cent this financial year (from July 1 2021 to June 30 2022) across the district; that is now reduced to 4.38 per cent.

For Upper Clutha ratepayers the average rates increase is even lower than the 4.38 per cent.

The rates increase for a median valued property in Wānaka will mean an increase in rates of around $86 for the year.

In Wānaka the average percentage for ratepayers has dropped by almost half; rates for a residential home with a median value ($845k) will now only increase by 2.77 per cent. In dollar terms that’s an average increase of $86 for the year, down from the anticipated $162 average.

For Hāwea, the rates increase for a residence with a median value ($570k) has dropped even more from an anticipated increase of $132 to just $47; while Luggate’s rates increase on a median valued ($520k) property has declined from $94 to $65.

Most business rates across the district show an increase on last year of between 0.85 per cent to 5.72 per cent, depending on value, location and property type.

The increase was predicted to be 2.5 per cent and the lower rates increase is attributed to the growth in the number of rateable units (up by 5.8 per cent on last year) and an increase in the capital value of ratepayers’ properties exceeding forecasts. 

“The total capital value of property across the district increased by 3.55 per cent in the year to 30 June 2021, slightly more than the 2.5% allowed for in the 10-year plan,” QLDC finance, legal and regulatory general manager Stewart Burns said. 

Several councillors questioned how council growth estimates were so wide of the mark.

Councillor Niki Gladding referred to several submissions to both the council’s draft Spatial Plan and draft 10-year plan hearings in May and June which said council’s growth projections were “wrong by a long shot” and questioned whether the council had got it right this time.

At the Spatial Plan hearings, Wānaka residents Peter Marshall and Nick Page criticised the council’s population growth projections which estimated an average of only 2.1 per cent growth annually over the next 30 years, saying the council has a history of underestimating growth.

Peter said the average growth for Wānaka alone over the past five years was 7.87 per cent; add in other factors, such as a film studio proposing the creation of a film industry in Wānaka, and he saw no evidence to suggest the district’s annual population growth would inexplicably drop to 2.1 per cent.

Stewart said it was very difficult to predict capital values and the numbers of new properties and the QLDC tended to err towards a conservative estimation when evaluating rates.

“The issue of resource consents can take years to give effect, so some of this property that’s been created in the last 12 months could have had its genesis five or six years ago,” he said. 

“We thought there may have been a reduction in growth given the impact of Covid last year but that may be coming through the system now….”

“There’s no real way of assessing what’s in the pipeline... because it’s largely reactive.”

Wānaka-based councillor Quentin Smith said he understood the council’s approach to setting rates but had he known the degree of underestimation in the QLDC’s growth predictions at the time the council was setting the 10-year plan programme he would have made different decisions. 

“If I’d known this at the time we set the programme I would have increased some operational costs when we’re short on things, like the tracks and trails renewals for instance… and I would have been happy to consider additional debt repayment,” he said.

Wānaka-based councillor Niamh Shaw said the reduction in increase in rates is generally a positive thing but while she appreciates the process is reactive she wondered if there was a better method to get more accuracy when predicting the rateable units.

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