The financial repercussions of the COVID-19 pandemic is having a very real impact on people and businesses all around our community. The Council too is very aware of the economic pressures many are now facing, which has led to an important change to rates for the 2020/21 year.
In late February, the Council went through the budget for the next financial year and determined that there would be a proposed 4.88 per cent rates increase. This would have been part of the draft 2020/21 Annual Plan to be adopted at the end of June.
Given the uncertain economic outlook we now face as a community, Councillors asked to assess what could be done to support residents. Last week (9 April), they voted to reduce that proposed increase to 2.5 per cent.
What this means is that the Council will look to make savings in the budget to bring the increase back to $900,000.
Many of our major capital projects, such as the Ashburton CBD revitalisation and the new wastewater pipe under the Ashburton River and pump station are already committed to and are loan funded, but there are other areas of the budget we can look at to find savings.
We are very fortunate that through the prudent financial management of current and previous Councils, Ashburton District Council is in a very good financial position. Such is this position, that only a few months ago, we received a AA+ credit rating. This rating not only signifies our strong standing but also opens up opportunities to access lower interest rates for loans we take out.
This is one area in which we can make some significant savings in the budget.
We are also now re-evaluating our forecasts and budgets and will bring our spending for the next financial year down to the 2.5 per cent increase, while also ensuring our levels of service are not drastically impacted.
The revised budget will need to be ready in time for the draft 2020/21 Annual Plan to be adopted ahead of the new financial year, so staff will be very busy amending budgets now to be ready by no later than 30 June.
Next month, the last rates instalment for the year will be due (20 May), and this too has been on the Council’s mind.
Councillors decided to help those who may be struggling financially at this time, by allowing ratepayers who incur a late fee to apply for the penalty to be waived, even if they’ve already received this assistance in the last 24 months. The process to apply for a waiver of the penalty has also been streamlined and made less formal and onerous.
If you are experiencing financial hardship, this will help to ensure you don’t incur additional fees on your rates bill.
We will be releasing more information about how to apply for this waiver in the coming days.