Nelson ratepayers face annual levy on top of increased rates to cover storm damage costs

Nelson ratepayers beware - an annual levy of $330, on top of increased rates, is on the cards to cover the costs of storm damage.

Other regions are looking to follow suit, and it comes as a leading economist warns that all rates will need to increase by up to 30 percent over three years.

When Nelson's hills came crumbling down last year, smashing into homes and tearing up roads, it cost the council $60 million.

To pay for that, the council's latest Long Term Plan is proposing a 'storm recovery levy' of $330 for every household - every year for 10 years.

"It's a lot of money for 10 years, but it's the reality of the bills, or chickens, coming home to roost from that storm event," said Nelson Mayor Nick Smith.

However, ratepayers are feeling hard done by. Immio Robert told Newshub he's disappointed in the council.

"It's not good at all, I think they are trying to rip us off and it's not fair. They try to make their problem our problem," he said.

Another resident said the fee should be included in the rates and not separate.

"It should be done on a percentage of property value if they are going to charge it... we're just living day-to-day," they said.

The levy is a flat fee regardless of whether your house has one bedroom or ten. 

"The problems Nelson face are not unique. All councils are grappling with budgets and the first stages of setting rates for next year," said Smith.

Nelson Council is also planning to lift rates by 8.2 percent, but it would have been a 15.2 percent rise without the separate storm levy.

"At $330 per household per year for 10 years is the most pragmatic way," said Smith.

And Nelson's not the only council. Hawke's Bay Regional Council's introduced a cyclone recovery charge of $55 per property, and Hastings District Council is considering a targeted rate for its recovery and property buy-outs.

That's something that local government expert Andy Asquith said could become the norm nationwide.

"The problem is, until local government is provided with an equitable funding regime, this will go on and on. Councils have got to do something because they can't do nothing," he said.

On top of that economist Cameron Bagrie is warning that all councils will need to increase rates by up to 30 percent in the next three years to cover growing expenses like high interest rates.

He told AM there's still about $4 billion of debt to be issued by councils.

"Some really big bold decisions need to be taken, and a hat tip to those councils that are prepared to be bold and put big numbers on the table," said Bagrie.

Cancelling out any gains from the Government's tax cuts.

"If you're going to provide tax relief, what are the trade-offs on the other side because there are going to be trade-offs," he said.