Financial Overview 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 Proposed Rates 4.15% 5.72% 5.92% 4.81% 5.50% 4.08% 3.48% 3.30% 3.00% 2.26% 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 This table shows that Council has gone above its policy in the first five years of the LTP albeit only marginally in 2018-19 and 2021-22. Also the Loan rate for Flaxbourne commences in 2022-23. Without this additional voluntary targeted rate Council would have complied with its policy in that year. The main driver for Council exceeding its Rates Cap is the significant lift in Capital Expenditure which has been commented on above. Despite projecting to exceed its self-imposed rates limit, Council remains Rates Increases and Rates Increase Limit committed to trying to remain within it and reviews its plans and projects annually to confirm their continued need and timing. Projects are deferred As identified above, increasing debt to spread the cost of Capital expenditure where this can be done without compromising maintenance and standards has a rating impact as do increased operating costs. The other major and this reduces the annual rates increases. The outcome of these annual contributor is inflation (27.0% over 10 years).Inflation means a change in the reviews is shown in the following graph; with the level of rates for 2018-24 costs Council faces, including materials like diesel, bitumen, pipes and other being well below the level of rates forecast when the 2015-25 LTP was construction costs. As these are not the same as the costs faced by prepared. households (eg; food, housing, transportation) and measured by the CPI Council, along with the majority of other Councils in New Zealand, uses inflation projections provided by Business Economic Research Limited (BERL) to inflate budgeted Operating and Capital Expenditure in years two to 10 of the LTP. Forecast BERL LGCI 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2.06% 2.12% 2.17% 2.21% 2.35% 2.29% 2.41% 2.53% 2.55% 2.64% Forecast Rates Increases Council has adopted as policy that increases in total rates will not exceed the LGCI movement by more than 2%. The following table shows forecast rates increases compared to Council’s policy. 2018-2028 Long Term Plan Page 17