Tasman looks set to have a new rate to fund the recovery of the storms last winter, but how that rate is set has yet to be locked in.
The June-July 2025 storms cost Tasman District Council about $14.6 million as it responded to the events and sought to repair infrastructure.
Those costs were added to council debt, and a new rate is proposed to pay it off.
The council’s proposal is for each property in the district to pay an extra $124.01 per year for the next five years to pay off the recovery costs.
However, three other options are being put to residents as the council consults on its annual plan for the coming financial year.
The four different recovery rate options vary whether the rate was a uniform fixed cost or based on properties’ capital values, and whether the rate should only be charged for five years to cover the costs of just the recent winter storms or should be charged on an ongoing basis to fund recovery from future disaster events as well.
The uniform fixed rate of $124 per property has been deemed a fair approach as each property contributes equally.
However, the council has noted that the figure may not be affordable, particularly for those with lower-value properties.
Basing the recovery rate on capital value instead of having a fixed charge would mean the amount ratepayers pay would depend on the value of their land and the improvements on it, such as the family home.
The council is unable to use resident income levels to set rates and so capital value can be viewed as the primary proxy by which the recovery rate could be made more equitable.
But Mayor Tim King has long called rates a “blunt tool”, and any rates-setting method was likely to disproportionately disadvantage some ratepayers.
Under a capital value recovery rate, different properties would be charged very different sums.
Out of a list of hypothetical properties that were representative of those across Tasman, it was a dairy farm in the Collingwood-Bainham area with a capital value of $7,020,000 that would pay the largest rate under a capital value model: $787.11 per year.
It was this example that swayed council staff away from a capital value approach and instead saw the uniform $124 per property earmarked as the council’s preferred method.
Out of the other representative properties, the second-highest capital value rate would be for a horticultural block in Hope that was within the extractive use rating area of the Waimea Community Dam, which would pay $384.93.
The lowest capital value recovery rate went to a residential Murchison property connected to the urban water supply that uses 131 cubic metres of water and whose capital value was $420,000, with a $47.69 rate.
A Richmond property with water connections, just 29 cubic metres of water use, and whose capital was valued at $430,000 was not far ahead at just $48.83.
Out of the representative properties, a lifestyle block in East Tākaka with a capital value of $1,130,000 would see the least variation between the $124 fixed charge and a capital value rate that would instead see it pay $128.31 per year.
Using land value alone, instead of capital value, would result in even greater variation – with the Collingwood-Bainham dairy farm paying $1141.68 and the Murchison home paying just $29.11 per year.
A land value recovery has not been listed as an alternative option by the council, though residents are free to suggest it through the consultation process.
Two of the council’s four options, including its preferred approach, have the recovery rate in place for five years, until the storm costs are paid off.
This approach would ensure that the added financial burden for ratepayers was only temporary but risked additional further financial shocks from future disaster recovery bills.
The alternative approach would be an ongoing rate that allowed the council to build a pool of money to draw from in future emergencies, but that put greater long-term financial pressure on ratepayers and risked those funds losing real value due to inflation and interest.
Other ways of setting the rate were raised as possibilities by the council but not ultimately proposed.
Those include having only affected areas pay the recovery rate which was deemed to add too much strain onto recovering ratepayers, as well as shortening or extending the repayment period to respectively either result in a greater immediate bill or risk future emergencies striking while Tasman was still paying off this recovery bill.
Nelson’s $60 million recovery bill from its August 2022 storm is being funded by a decade-long annual $300 charge on each separately used or inhabited parts of a rating unit.
Tasman’s draft annual plan, including the proposed storm recovery rate, is out for consultation until 3 May.
Online submissions can be made through the Shape Tasman website, while physical copies of the consultation document are available at council service centres and libraries.
