A conservative estimate in the growth of the rating base in the Queenstown Lakes District has largely offset unforeseen additional rate funded expenditure, QLDC finance manager Stewart Burns said.

The full council would be asked to set the rates on Friday (July 29).

"The additional rate funded expenditure, which has been added to the draft Annual Plan through the submission process, has been partially offset by the slightly larger than expected growth," Mr Burns said.

The overall effect was that the indicative rate movements shown in the draft Annual Plan were slightly understated with the average rate increase finally sitting at 4.3 percent. An average rate increase of up to 4.9 percent was forecast in June, but the final growth figures for last year were stronger than expected, which meant that a lower average increase was now possible.

"The effect of the increase will vary according to a number of factors including, location, services received, valuation and property usage," Mr Burns said.

It should be noted that the Council is a large non profit community organisation that does not, has not and will not make a profit, he said.

"Any difference between the revenue we collect and our operating expenditure is correctly termed an operating surplus. Council does budget for operating surpluses - all of which is used to fund capital projects or debt repayment," Mr Burns said.

ENDS

For further information please contact Stewart Burns 441 0499

By: Tamah