Draft Annual Plan 2026/2027
Welcome to Tasman District Council’s draft Annual Plan and budget for 2026/2027, including proposed fees and charges.
The coming year represents a time of significant change for local government. Councils everywhere are navigating new expectations, major sector reforms, and increasing financial pressures. The Tasman District also continues to recover from the June/July 2025 weather events, which placed added strain on our communities, infrastructure, and on the Council’s work programmes and budgets.
Proposed changes at a glance
The Council is facing considerable financial challenges arising from interest rates, depreciation requirements (due to updated asset valuations), insurance costs, the impacts of the 2025 weather events, Government-mandated compliance changes to the supply of water and resource management, and increased costs to maintain the Three Waters and roading networks and our parks and reserves.
These cost escalations since the adoption of Tasman’s 10-Year Plan 2024 – 2034 continue to affect the cost of business operations and service delivery. Last year’s Annual Plan signalled a 7.2% rates increase for 2026/2027 and we saw a challenge to this figure in November 2025, when a forecast rate rise of 11.2% was identified.
In response, we undertook a thorough review of our work programme and budgets for 2026/2027. The Mayor and Councillors have been working with staff to minimise the cost to ratepayers. A range of changes and efficiencies have been identified enabling us to propose a rates increase of 9.9% while maintaining our current service levels and business operations.
Councils are now providing two rates figures – ‘Three Waters’ and ‘Rest of Council Business’ – to reflect the changes to water delivery services. This distinction could become more important in coming years, as the Government’s proposed rates cap applies to non-water rates. Recovering the costs from the June/July 2025 weather events in Tasman also adds a ‘Recovery’ rate figure to our total rates breakdown.
We acknowledge that as we address these economic pressures, they are also impacting households and businesses within our District. We are dedicated to finding an approach that balances affordability with the need to keep delivering the important services you expect and value. As we’ve heard from our residents already, doing the basics well is a good benchmark.
PROPOSED CHANGES AND OPTIONS
This Annual Plan is about managing the immediate pressures and adapting our plans and budgets accordingly. The review process aimed to find ways of minimising the increase to rates, while continuing to deliver on our obligations and the expectations of our residents and ratepayers. We also considered the services and capital improvements needed by our Tasman community and recovery of some costs through user-paid fees and charges.
To address the financial pressures, we are proposing several changes including:
- A new rate to recover the costs of the June/July 2025 weather events
- Adjusting operating budgets and rephasing parts of the capital work programme
- Slowing the funding of depreciation for our roading network
- Increasing most fees and charges by 7%
To ensure we are delivering value, restoring confidence, and reflecting the different needs of different places, we believe that the inclusion of local voices and community connection is essential to this process. This document outlines the changes we are proposing to reduce the impact of a higher rates increase and we invite you to read it and share your views.
What is an Annual Plan and why does it matter?
The Annual Plan is our programme and budget for the year. It sets out the activities, services, and capital projects we intend to deliver and how we will fund them, including the rates required. It also highlights any significant changes from what we agreed in Tasman's 10-Year Plan 2024 – 2034.
The Council will make final decisions on the Annual Plan 2026/2027 in June 2026 and the final plan will be available at tasman.govt.nz in July 2026.
Under the Local Government Act, councils must consult on an Annual Plan when proposed changes are significant or materially different from what is in the 10-Year Plan. Because the proposed changes for 2026/2027 are substantial, we want to be transparent about them and give you the opportunity to provide feedback on the things that affect you.
The purpose of this information is to:
- Explain how we worked out the rates revenue increase and how we plan to pay for things.
- Share the current challenges the Council is facing.
- Ask for your feedback on the changes that could affect you.
Part 1: Our operating environment
The Annual Plan 2026/2027 focuses on finding the right balance – continuing progress towards our long-term vision for future generations, while keeping rates fair and as affordable as possible.
We are preparing this budget in a challenging environment. Key pressures include the Districts’ ongoing recovery from the June/July 2025 weather events, new national expectations and sector reforms (including potential rates capping requirements), and increasing financial constraints across the organisation.
In our 10-Year Plan 2024 – 2034, we projected a 5.2% rates revenue increase in Year 3.
After reviewing our work programme, responding to cost pressures and reassessing what is needed for the year ahead, the Annual Plan 2026/2027 now proposes an average rates revenue increase on 9.9% across all ratepayers – including residential, business and rural properties.
Rates income increase
Tasman is a diverse district with urban, rural, and commercial properties. Because of these differences, the proposed rates changes vary significantly – from 1.91% to 13.28% – depending on where you live, the services you receive, and whether your property is connected to water and wastewater services.
For more details on how these changes affect different types of properties, see pages 10 and 11 in the consultation document, which outline the impact on a selection of example properties.
You can also see the proposed increases for specific properties using our rates search.
Council debt
The Annual Plan changes are forecast to increase our debt level to $320 million by the end of 2026/2027. This remains within the Council's dynamic debt ratio, but is $14.0 million higher than planned in Tasman’s 10-Year Plan.
How the Council is funded
Councils fund operations through a combination of rates, fees and charges, subsidies and grants from the central government, and our investments.
Where the money goes
Our plans for the 2026/2027 financial year were originally set out in Tasman's 10-Year Plan 2024 – 2034, adopted in mid-2024. At that time, we forecast a rates revenue increase of 5.2% for 2026/2027.
Since then, rising costs and reduced external funding have continued to affect the cost of delivering services and running Council operations. During the Annual Plan 2025/2026 process, the indicative rates increase for 2026/2027 was signalled at 7.2% and by November 2025 it had further increased to a forecast rate rise of 11.2%.
Over the past two years we have undertaken a thorough review of our work programmes and budget for 2026/2027. The Mayor and Councillors have worked closely with staff to identify savings and efficiencies that reduce costs to ratepayers, while still meeting our obligations and community expectations.
This work has shifted the dial considerably on operational costs. Last year’s Annual Plan introduced several changes to lower rates, including reprioritising our asset insurance saving $700,000, reducing external consultancy budgets by $794,000, reducing staff costs by $1.4 million, and selling surplus Council property to reduce debt.
We have continued to focus on opportunities to avoid or reduce costs, while managing the impacts of the June/July 2025 weather events.
The Civil Defence Emergency Management Act 2002 requires councils to provide resourcing for emergency events. Our staff contributed approximately 15,000 hours at the Emergency Operations Centre to support the response to the June/July 2025 weather events.
Further changes include bringing several externally contracted consulting services in-house, slowing digital asset replacement, maintaining a freeze on non-critical recruitment and undertaking an organisational restructure.
As a result of this work, we are now proposing a 9.9% rates revenue increase for 2026/2027, while maintaining current service levels and core business operations.
Part 2: Have your say
This proposal sets out how we have responded to the context in which we are operating and the decisions we have made to balance affordability with delivering the core important services you expect and value.
The proposed changes are set out in our consultation document.
We welcome your feedback by 5.00pm on Sunday 3 May, particularly on:
- What is your preferred option for the 2025 Weather Event Recovery Rate?
- Do you have any feedback on any of the proposed budget movements outlined 1- 4 below? Each includes a brief description of what it is and the associated budget increase or decrease.
Click here to have your say.
Our proposed changes
Weather event recovery rate
Severe weather in June and July 2025 caused significant damage across parts of the District. The Council has been running an extensive response and recovery programme, which is still underway. The current estimated net recovery cost is approximately $14.6m, although this figure is not yet final.
Non-rates funding sources for the 2025 weather events recovery have now been exhausted and the Council must recover its share of the remaining costs through rates.
We have shortlisted four options, outlined below. These are called a targeted rate, as they are for a specific purpose. The rate is proposed to apply district-wide, so it will be paid by all ratepayers
Targeted District-wide Recovery Rate for five years to repay the costs of the 2025 weather events only, charged at a uniform amount ($125).
This is the Council's preferred option.
Benefits and weaknesses of this option:
- Transparency: Simple to understand and ensures funds are used solely for recovery.
- Fairness: All ratepayers contribute evenly, weather events are district-wide risks.
- Equity: Residents in the most affected areas will not pay more than others, supporting community wellbeing.
- Affordability: High-value property owners do not face disproportionately higher rates. Lower-value property owners may have less ability to pay the new rate but face the same level of rates as other property owners.
- Time limited impact: Rates will increase from 2026/2027, but the rate will end after five years once the recovery costs are fully repaid.
Targeted District-wide Recovery Rate for five years to repay the costs of the 2025 weather events only, charged by capital value.
Benefits and weaknesses of this option
- The transparency, equity and time limited benefits and weaknesses are similar to Option 1.
- Fairness: All ratepayers contribute, recognising that weather events are district wide risks. But ratepayers contribute in proportion to the capital value of their property.
- Affordability: High-value property owners, who may have more ability to pay the new rate, face higher rates. Lower-value property owners, who may have less ability to pay the new rate, pay at lower levels.
Targeted District-wide Recovery and Emergency Event Financial Resilience Rate – ongoing to repay the costs of the weather events initially and then be used to build a fund to respond to future natural hazard events charged at a uniform amount.
Benefits and weaknesses of this option
- The transparency, fairness, equity and affordability benefits and weaknesses are similar to Option 1.
- Ongoing impact: Rates will increase from 2026/2027 and the new level will be ongoing. After the first five years the revenue will be used to create a fund for recovery from future natural hazard events.
Targeted District-wide Recovery and Emergency Event Financial Resilience Rate – ongoing to repay the costs of the weather events initially and then be used to build a fund to respond to future natural hazard events charged by capital value.
Benefits and weaknesses of this option
- The transparency, fairness, equity and affordability benefits and weaknesses are similar to Option 2.
- Ongoing impact: Rates will increase from 2026/2027 and the new level will be ongoing. After the first five years the revenue will be used to create a fund for recovery from future natural hazard events.
The rating impacts of Options 1 and 2 are demonstrated on the representative properties from page 19 of the Recovery Rate Options Analysis, which can be accessed below.
Extending the period over which we repay the debt for recovery from the 2025 weather events would reduce the level of the rate each year, but it would also increase the number of years that the rate is charged for and increase the total costs to both the Council and the community higher than a shorter period. A longer repayment period would also increase the risk that another natural hazard events could occur before the debt for the 2025 weather events is fully paid off, requiring additional borrowing and further recovery costs.
The following material about the proposed 2025 Weather Events Recovery has been prepared to support this consultation:
- Consideration of options and Local Government Act 2002 provisions (including rating impact modelling information).
- The Council’s Revenue and Financing Policy, showing changes to introduce the proposed new rate.
- Read more in the consultation document.
1. Operating budget movements
Operational expenditure for the draft Annual Plan is proposed to increase by $10.2m to $102.4m, compared with Year 3 of Tasman’s 10 Year Plan 2024 – 2034.
Indicative key changes (increases and decreases) are outlined below or click here to view them in a table. Minor changes are not listed.
Fees and recoveries
Higher revenue is expected than forecast due to increased activity following the 2025 weather events – particularly in Rivers and Roading activities – and greater gravel extraction volumes. Building and resource consent revenue is also tracking above earlier assumptions.
Maintenance
Maintenance budgets have increased by $7.0m. Of this, $4.1m relates to Three Waters, driven by new central government regulatory requirements. Some maintenance budgets that were reduced in Tasman’s 10-Year Plan 2024 – 2034 now need to be reinstated due to actual demand, particularly for reactive maintenance.
Additional increases relate to Roading (slip response and tree work), Kingsland Forest (following the end of DIA funding), and management of Council’s reserves and ageing facilities.
General operating costs
New central government levies – Taumata Arowai ($250,000) and the Commerce Commission ($75,000) – were not known when Tasman’s 10-Year Plan 2024 – 2034 was prepared.
The cost to Council of using the Regional Sewerage Business Unit scheme has increased by $700,000 due to ongoing growth in areas connected to the system, including parts of Richmond, and higher wastewater flows during wet weather events.
The planned $3m museum grant for a new facility has been rephased from 2025/2026 to 2026/2027, as the work was delayed last year.
Professional fees
Professional fees have increased by $1.3m, with $1.1m relating to Three Waters compliance activity. An additional $500,000 is sought to support the development of strategic plans required under new legislation. Further funding is included to respond to resource management system changes, including preparation for a Regional Spatial Plan.
Operations
Council-wide insurance has risen above the assumed level in Tasman’s 10-Year Plan 2024 – 2034. Although some recent reductions in premiums have been reflected in the draft Annual Plan, overall costs remain higher than previously planned. This has also been felt in both the commercial and private sector.
Employee benefits
Inflation and higher-than-expected premiums for staff health insurance, along with associated Fringe Benefit Tax, have contributed to increased employee benefit costs.
Loan repayments (unfunded depreciation)
There has been an increase of $3.2m. Council continues to move towards fully funding depreciation; however, asset revaluation impacts were underestimated in the 10-Year Plan. Higher valuations, particularly for roading and three waters assets, have materially increased depreciation funding requirements and associated rates impacts. We are looking to be more conservative in Tasman’s 10-Year Plan 2027 – 2037.
Sale of assets
The draft Annual Plan includes $2.5m of asset sales, consistent with decisions made during the Annual Plan 2025/2026 process. This is $1m higher than planned for in Tasman’s 10-Year Plan 2024 – 2034.
Net interest costs
Net interest costs have increased by $500,000. Higher borrowing has increased the level of liquid assets required under our Treasury policy, generating more interest revenue than assumed in Tasman’s 10 Year Plan 2024 – 2034. The interest we receive offsets the below interest costs.
Overall interest rates have risen since adopting Tasman’s 10-Year Plan 2024 – 2034, increasing interest expenses above earlier expectations.
2a. Community Facilities projects
The three community facilities projects
Progressing three community facilities projects was planned and budgeted for in Year 3 of Tasman’s 10-Year Plan 2024 – 2034, as well as the current financial year (2025/2026). The Council has considered the next steps for each project, the rating impacts and its preferences.
We are seeking feedback on progressing or pausing these projects.
Tapawera Community Hub
Should we continue the project as planned, OR pause and defer to Tasman’s 10-Year Plan 2027 – 2037 discussions?
The facility needs of the Tapawera community are not yet clear. As a consequence, the Council’s proposal is to pause this project and defer it to Tasman’s 10 Year Plan 2027 – 2037 discussions to further explore how best to support the Tapawera community’s ambitions for a new Community Hub.
2026/2027 rating impact: 0.02% or $34k
Potential ongoing annual operating costs: $156k*
Waimea South Facilities
The proposed Wakefield Hub
Should we continue the project as planned, OR pause and defer to Tasman’s 10-Year Plan 2027 – 2037, with further investigation to support discussions?
The Brightwater facilities upgrades
Should we continue the project as planned, OR undertake some weatherproofing work this financial year then pause and defer to Tasman’s 10-Year Plan 2027 – 2037 discussions?
The Council's proposal is to continue these projects.
2026/2027 rating impact: 0.03% or $45k.
Potential annual operating costs for the Wakefield Hub: $408k*
Motueka Pool
Should we continue the project as planned, progressing through the design stage, OR pause and defer to Tasman’s 10 Year Plan 2027 – 2037 discussions?
The Council’s proposal is to continue this project.
2026/2027 rating impact: 0.16% or $204k
Potential ongoing operational costs: $862k*
*The operating costs provided are indicative estimates and subject to change following future council decisions on individual projects. They are included to show the potential ongoing annual costs of each facility.
2b. Capital programme changes
Capital expenditure in the draft Annual Plan is proposed to increase by $7m to $80.6m, compared with Year 3 of Tasman’s 10 Year Plan 2024 – 2034, reflecting project rephasing and updated priorities.
Several projects have been deferred beyond 2026/2027 and the upcoming 10-Year Plan 2027 – 2037 process will further manage timing and prioritisation.
Indicative key changes to the capital programme (increases and decreases) are outlined below or click here to view them in a table. Joint Venture capital expenditure is not included and minor changes are not listed.
Water supply
- Reticulation upgrades, growth projects and compliance work ↑(+$14.4m)
- Lower Queen Street upgrade deferred, other growth projects rescheduled ↓(–$8.8m)
Wastewater
- Growth projects, sludge disposal upgrades and renewals ↓(–$5.4m)
- Motueka Wastewater Treatment Plant membrane replacement ↑(+$1m)
Waste management
- Upgrades to ensure the facilities are fit for purpose ↑(+$2.3m)
Community facilities
- Motueka Community Pool ↑(+$2.1m)
- Saxton Green play space ↑(+$1.2m)
Rivers
- Rebuilding riverbanks washed out from the 2025 weather events and additional flood protection for Motueka ↑(+$7.2m)
Read the full capital programme proposed for 2026/2027
Please note there is a correction to the capital programme total figure of $80.6 million shown on page 16 of the Annual Plan 2026/2027 Consultation Document (CD) and therefore a difference to the detailed information linked above. This difference comes down to two issues:
- There was an addition error in the CD table, which understated the total figure by $17.4 million. When corrected, the CD figure should read $90.3m excluding the capital expenditure for our joint ventures (JVs), or $98 million including the JVs.
- The detailed information linked above does not include $11.2 million of capital lag. We adjust the figure down for the lag because projects can run into issues with, for example, resource, consents, or land purchase, and so the full programme budget is usually never spent.
3. Funding depreciation
We have been progressively moving toward fully funding depreciation (i.e. the cost of the assets wearing out over time)and this impacts our ability to achieve a balanced budget, and plan to have completed this by 2030.
Fully funding depreciation means that we do not need to borrow to replace existing assets when they reach the end of their life.
We are transitioning towards funding our roading/transport assets and had planned to reach 24% funding in 2026/2027. To help reduce the rates increase, we are proposing to slow this transition and instead reach 21% by the end of 2026/2027. This will reduce the rates increase by 0.5% (approximately $650,000), but it would also increase net debt by a similar amount from 2026/2027.
Alternatively, we could continue to move to fully funding the roading/transport depreciation at the planned increase to 24% in 2026/2027 (which would increase rates by a further 0.5% and reduce debt by $650,000), or to move more quickly or more slowly.
4. Council fees and charges
Council sets fees and charges to recover some of the costs of delivering functions, services, and activities where there are private benefits, in accordance with our Revenue and Financing Policy.
A standard increase of approximately 7% has been applied where appropriate to reflect inflation and service cost pressures. Some fees differ from the standard increase due to legislative settings, affordability considerations, or the need to achieve appropriate cost recovery.
Overall, we forecast raising $35m from fees and charges in 2026/2027. This revenue helps reduce the amount we need to collect through rates.
The Council’s proposed Schedule of Fees and Charges for 2026/2027, along with the Statement of Proposal, sets out all the proposed changes.
Specific proposed changes to charges of note
- Staff charge-out rates are proposed to increase by 3.5% from $226.00 to $234.00, reflecting updated service delivery costs.
- The Project Information Memorandum (PIM) fee is proposed to change from $544 to $1,000, an increase of 87% to fully recover costs and reduce the subsidy from rates.
- Property information files are proposed to be charged at $60 per file, with a 50% reduction for homeowners. A bulk user discount of 60 files for $3000 will also be available.
- Building assurance: Section 72 and section 75 decision and removal fees 19% increases to these fees are proposed to reflect higher costs associated with delivering this service, including a 35% increase in Land Information New Zealand lodgement fees.
- The six stock impounding fees are proposed to increase above the standard 7%. The increased fees align with other councils and account for the actual cost of impounding these animals.
Get more details
It is important that you have your say on these proposals so please take the opportunity to share your views with us.
