A previously predicted rate increase has been dramatically reduced from 16.5 percent to 5.1 percent for the next financial year.
The total rates increase was agreed to during final deliberations on the 2024-27 Long Term Plan (LTP) held on Thursday 6 June.
The reduction will be driven by $8.5 million in savings for the 2024-25 year and a special one-off dividend of $5 million from the council’s commercial arm, Far North Holdings Limited.
FNHL CEO Andy Nock told RNZ "The board of Far North Holdings is pleased to be able to support FNDC, in its efforts to keep any rates increase to a minimum, by committing to pay a special dividend of $5 million, in addition to an ordinary dividend of $500,000. This is being paid during the coming financial year based on accumulated and projected profits."
The council initially proposed a 16.5 per cent total rates increase. This was on par with increases proposed by many other councils in Aotearoa, as each grappled with spiraling inflation, increased insurance and contractor costs, and increased infrastructure bills.
Addressing the special dividend request from Far North Holdings, Kahika Moko Tepania explained that the council had created the CCO Far North Holdings to make money and to offset rates.
“I’m very excited to make this request. This will hugely alleviate the rates increase and burden for our ratepayers for the upcoming financial year. A dividend of that size is only possible because our commercial arm has proved it can make savvy investment decisions that benefit the local economy and ratepayers.”
Increases to the total rates take over the three years of the Long Term Plan now stand at 5.1 per cent for 2024-25, 11.43 per cent for 2025-26 and 7.2 per cent for 2026-27. These figures will be confirmed when the council adopts the LTP and strikes rates for 2024-27 at its next meeting on 26 June.
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