The purpose of the Rotorua Catchments activity is to promote the sustainable management of the Rotorua lakes and their catchments for present and future generations. It includes work to meet commitments in our Regional Policy Statement and Regional Plans (including Lake Action Plans) and in specified resource consents. The activity also supports the ancestral relationship of Te Arawa with their lakes through membership of the Rotorua Te Arawa Lakes Strategy Group, set up in accordance with the Te Arawa Settlement Act.

Subsidies and grants are available for some of the work undertaken in this activity and the remainder is funded through rates. In the 2021-2031 LTP, we chose to fund the rates portion of operating costs through 50% from targeted rates over the Rotorua district and 50% from general rates over the whole region.

In the recent review, we noted that the causes of water quality issues are historical and intergenerational. We also recognised that the work to improve water quality benefits the whole catchment ecosystem (including the Kaituna and Tarawera rivers) and the regional community. As a result, we propose that the rates funded portion of operating costs should be funded by the whole region, through general rates. This is consistent with the way we fund catchment management activities in other parts of the Bay of Plenty region.

The financial impact of this proposed change would be to shift about $4.5 million each year of targeted rates paid by Rotorua properties to general rates, paid by all ratepayers in the region. This would mean rates in Rotorua would be lower than if the current policy was maintained, and for other districts, rates would be higher.

If this policy change was implemented from 1 July 2024, the impact on general rates would be substantial, so we propose to delay the change in policy to 2025/26, and to transition the switch from targeted rates to general rates over three years, with full implementation in 2027/28. For the 2024/25 financial year, the 2021-2031 LTP Policy would apply. The impact is shown below, comparing Option 1 (current, 2021-2031 LTP policy) with Option 2 (proposed new policy and transition proposal).

The policy for funding capital expenditure remains unchanged under these proposals. For both options, the funding sources are loans, reserves, grants and subsidies, and insurance recoveries.