Financial Strategy in the longer term maintenance costs also result. Because Council’s costs are not the same as the costs faced by households eg: food, housing, transportation etc as measured by the CPI, Council has decided to use the specifically developed LGCI as its benchmark. It has further decided that it will aim to keep increases in total rates below the LGCI movement plus 2%. The following table shows forecast rates increases, LGCImovements and the difference between the two showing where Council has exceeded the LGCI plus 2%stated above. The table also shows that Council has exceeded its self- determined “rates cap” in the first four years of the Long Term Plan. The main reason for this is the high level of capital expenditure programmed in those years to meet established community expectations established from previous consultation and government standards. This increased level of capital expenditure generates additional depreciation, operating and interest costs. The second main driver is the proposed increases to levels of service contained elsewhere in this document, all of which have been developed to meet Operating Revenues requests from the Community and government expectations. Total Operating revenue (from the Funding Impact Statement) is forecast to rise from $104 million in 2017-18 to $150 million in 2027-28. 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Proposed The following graph shows the sources of operating revenue throughout the Long Term Rates 4.15% 5.72% 5.92% 4.81% 5.50% 4.08% 3.48% 3.30% 3.00% 2.26% Plan. Movements Rates Cap 4.06% 4.12% 4.17% 4.21% 4.35% 4.29% 4.41% 4.53% 4.55% 4.64% (LGCI+2%) Within/Above 0.09% 1.60% 1.75% 0.59% 1.16% 0.21% 0.93% 1.22% 1.54% 2.38% Rates Cap The amounts shown above are the total rates increases throughout the Long Term Plan. There will be properties that will pay less and others that will pay more, depending on the services that they receive. Samples for areas across the District are provided within the Long Term Plan, “Rates Movements” section. The other point to note is that while this document sets outs Council’s plans for the next 10 years, each year it reviews its priorities and need to undertake capital projects with the objective of reducing rates. As a result, the Council’s limit on total rates equates to $97.6 million, the value of rates budgeted for 2027-28. However, Council has an established track record of having future years’ rates increases being less than the amounts signalled in this plan. Financial Trends and Summaries within the Ten Year Plan Operating Expenditure The following graph shows that total Activity related operating expenditure is forecast to rise from $97 million in 2017-18 to $138 million in 2027-28 an increase of 43.3%. 2018-2028 Long Term Plan Page 163