As someone who had a part in setting ORC rates, and as a recipient of several complaints about the percentage rise in this year’s rates demand, this blog is about the percentage rates increases, why they’re higher for Queenstown Lakes and other parts of Central Otago, and why rates are going up at such a rate.
I’d also like to offer a bit of a breakdown about what ORC actually does with your hard-earned. That will come late in this post if you’re still with me once we’re through the increases bit. Then finally I’ve included a wee bit of commentary from my perspective about whether ORC provides value for money.
Let’s start with actual increases:
- The Otago region-wide average rate increase was 16.3%. Actual increases varied depending on several factors including location of the property, its valuation and the mix of rates that apply to the property.
- Both Queenstown Lakes and Central Otago have higher average rates due to the higher capital values in these districts. This impacts CV-based rates like general rates, transport, and the new catchment management rate that was introduced this year.
- Increases in the Queenstown area are higher than average as they include an increase in transport rates because we are now fully funding the current year's operating costs and an existing deficit that is being repaid over the first 5 years of the Long Term Plan. (This goes back to a historic issue – in 2020, worries about rate increases in Covid times, ORC borrowed the increased costs of public transport provision rather than rate for them at that time – this is a salutary lesson in why that is always a bad idea – we are now having to pay that back.
- There were also changes in the financial rating model that had an impact – best refer to the LTP document to explain this.
So – using averages again, always somewhat misleading, this table shows the final average increases for each district in Otago:
Queenstown | 35.8% |
Dunedin | 5.7% |
Central Otago | 17.8% |
Clutha | -0.8% |
Waitaki | 8.4% |
Total | 15.0% |
For the record, the rates on our family home went up by 38.7%. A bigger increase than all the averages.
Below I’ve created some graphs (more accurately, ChatGPT has created some graphs) to put ORC rate rises in context with other regions around the country. You’ll note in the first graph that ORC’s percentage increase is very high (and this is working on averages – some people’s percentage increase is more like 50%)
But not high in terms of dollar rises for each region:
This means that ORC rate rises are going up from a relatively low base. This is evident when we look at the average rates paid to regional councils across the country:
Worth noting here is that ORC rates used to be the lowest in the country by far. Over the last two Long Term Plans, ORC has introduced large work programmes in response to government and community demands. This costs money and as a consequence, ORC rates have moved into the lower band of New Zealand’s regional councils.
Next, what’s behind the rate of increase?
In official speak, the level of service has increased in response to those increasing demands. People want us involved in keeping water clean, providing more public transport, and updating long overdue plans such as the Air Plan.
In simple speak, ORC used to do very little and now it needs to do a lot, and that costs more. Here are a few of the costly specific increases in service.
- Back in 2019/20 the Whakatipu Public Transport service had only recently begun and additional spending associated with more routes and better timetables began to be introduced – much of this was funded through rates.
- Around the same time, emergency management moved to ORC as a regional activity rather than being provided by each Territorial Authority (local council) – the cost shifted from your local rates to your regional ones.
- Biosecurity activity was increased to implement the Regional Pest Management Plan and the biosecurity rate was introduced in the 2021 LTP.
- From 2019, spending on policy greatly increased as we struggled with a not-fit-for-purpose Regional Policy Statement and its associated Land and Water Regional Plan. This work included associated science, environmental monitoring and regulatory support which allows ORC to build the science needed to develop such plans. So, new monitoring sites, scientists and field staff were needed for this work along with the planning staff, legal teams and consultants who put plans together so they are defensible and reflect both the law and community aspirations.
- Along with cental government legislation there is also community demand, particularly expectations that we deliver improving water quality, air quality, climate change responses, hazard identification, and associated mitigation and adaptation planning even as these things become more difficult and expensive to deliver.
Now to explore some of the work that is funded by our rates:
Water Management: ORC monitors water quality and allocates water quantity. It’s ORC that comes down on local councils, farmers, contractors or anyone else who breaches water consents by allowing unconsented pollution into Otago’s waterways. (Yes, a lot of pollution is consented and most of our sewerage discharges to water after treatment). ORC also issues the consents that allow some level of pollution, while trying to maintain water quality and monitoring impacts to maintain water body health. Worryingly, 13% of our waterways fail at least one national bottom line and our great lakes are showing early signs of stress. We know these things through our monitoring programmes which you can follow here: https://envdata.orc.govt.nz/AQWebPortal/Data
ORC allocates the water that local councils, irrigators and hydro users (for example) can take. It attempts to make sure rivers maintain enough of their water for health while allowing a certain amount for activities like irrigation. There are huge legal and planning bills in this work as we work through the issues around water allocation and water.
People care about Otago’s water and expectations of ORC are increasing. https://www.orc.govt.nz/your-council/latest-news/news/2024/february/water-quality-and-climate-change-top-survey-issues-again-orc/
Here’s the detail on ORC water plans
Flood Protection: Think the flood protection in Alexandra, the Shotover training line that slows any backflow into Lake Whakatipu, the rock buttress in Albert Town and the Taiere drainage scheme. https://www.orc.govt.nz/managing-natural-hazards/flood-defences/flood-drainage-and-river-management/
Air Quality: ORC monitors and tries to improve air standards. Think Arrowtown – air quality there just a few years ago was truly bad in winter. It’s not perfect now, but is greatly improved because of ORC programmes. The trend line is going the right way. https://www.orc.govt.nz/your-council/plans-and-strategies/air-plans-and-policies/
Biodiversity & Wildlife: My favourite. ORC does heaps to protect Otago’s habitats and species. Think scientists who support regeneration programmes and catchment groups, Ecofund, integrated catchment work, large scale environmental fund. Think support for Wilding Conifer Control groups and other environmental protection and regeneration groups which are always desperate for support. We are about to revisit the Biodiversity Plan. https://www.orc.govt.nz/your-council/plans-and-strategies/biodiversity-strategy-and-plans/
And here’s a link to the Biosecurity Plan – closely related to Biodiversity, and Pest Management Plan. https://www.orc.govt.nz/your-council/plans-and-strategies/biosecurity-strategy-and-plans/ At a recent workshop we discussed potentially bringing these two plans together. I was also interested in the following image: You can see ORC seriously needs to act BEFORE the public is aware there is even an issue.
Public Transport: My second favourite. If you’ve been in a car anywhere near Queenstown lately you’ve likely suffered congestion. We can’t provide enough roading and parking for all the cars that want to get across the bridges into Queenstown or Frankton flats. So we need another way. As far as I know, Public Transport is that other way – especially when networked with trails for bikes and feet. And that’s before we start thinking about the impact of fossil fuels on climate health and air quality which would need another post. But buses are expensive to run and our system is, shall we say, rudimentary, but effective. For those, like me, who use buses, that we have any system at all is awesome and, following a period of unreliability, ORC is running a pretty reliable and convenient bus system now with rapidly increasing patronage numbers (QT up more than 50% in the year ended June 2024).
The next question here is does ORC provide value for money? My perspective:
6 years ago, ORC had the lowest rates in the country. Frankly this was because it didn't do much. Since then, our communities have made it very clear that they don’t like the degradation they’ve seen and want ORC to do a whole lot more to a) prevent it and b) repair it. As a result of a greatly increased work programme, rates have soared. But they’re still among the country’s lowest. For those who prioritize biodiversity, climate adaptation/mitigation, and sustainability the council’s work is likely seen as high value for money spent. But those focused on immediate cost concerns might not see it that way. ORC conducted an efficiency review this year – independent – and it was generally endorsed for its high efficiency, although there were some areas for improvement which our staff are working on. ORC has low spending per capita compared to the rest of NZ and achieves a great deal.
ORC new building – this seems to cause some angst so let’s get into it.
Staff are squished and across two buildings in Dunedin. One is expensive to rent, one is valuable to sell. Port Otago came up with a solution – they are commercial property developers with developments mostly in Hamilton (and a provider of dividends that help keep our rates lower than they might otherwise be). Their solution was for them to repurpose a building (it’s not new, it’s the old warehouse building) and rent it back to ORC. The council will spend approximately $11.2 million to fit out the building. This funding is already in place – some from the sale of land originally planned for a different office site ($7.9 million) and the rest from a building reserve fund. ORC will lease the building from Port Otago at an annual rent of $2.59 million. Any surplus earnings from the rent will return to the ORC through Port Otago, which helps offset the long-term cost Otago Daily Times Online News. So you’ll not see your rates pouring into this new building.
There’s an area I haven’t delved into here and it’s expensive. It’s doing government’s bidding. You may have noticed the Minister for Environment trying to get ORC to pause its Land and Water Plan. That’s because government now wants to change direction and remove some of the directives that plan is responding to. https://newsroom.co.nz/2024/09/23/otagos-simmering-water-wars-bubble-towards-boiling-point/
These swings and shifts in government policy and direction cost an absolute fortune – think lawyers, consultants and the whole gravy train. This is the work I’d want us to be able to drop – and it would reduce rates. We have a broken system which costs us all small fortunes, but that is a post for another day.
Mostly, as I see it, your rates help ORC provide a bit of a buffer against the decline of our environment. I know rates are high compared to days of old, I know everything’s hard right now, but without a healthy environment we truly have nothing, and the threats to our environment are increasing exponentially. What ORC works with is nowhere near enough and there’s a huge battle to get anywhere given the economic forces that push against environmental protection or restoration. I’m very open to your thoughts about how we could do better given what we have to work with.
If you still have more reading in you after this lengthy missive, here's a reflective piece I enjoyed about the need to stand back and have a good look at the rural sector and its overall health.
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