Central Otago facing 21.4 percent rates rise

by Kim Bowden - Apr 24, 2024

Despite what is referred to by the council's top number cruncher as an "absolutely barebones and essentials only" spending plan for the year ahead, ratepayers in the Central Otago District are being asked to pay almost $10 million more in rates than they did last year.

A significant chunk of that rise - $5.4 million - is driven by growing costs for three waters.

Other money suckers are waste, costs for which are set to rise by $1.24 million, and roading, by $1.13 million.

Together, the big three account for 81 percent of the rates increase. 

The council is proposing an average rates rise of 21.4 percent, although because of where the costs fall urban households and businesses are set to take a harder hit than rural.

At a meeting today Central Otago District councillors have agreed to put the draft budget and supporting documents to the public for consultation, with the official window of time for people to have their say opening on Friday.

Reporting to councillors, Vibhuti Chopra, the council's contracting chief financial officer, says compliance and regulatory issues are pushing rising three waters costs; building resilience, roading costs; and sustainability, waste costs.

It is her view these sorts of pressures are "here to stay" and, in some cases, are only going to become more pronounced.

"We're facing headwinds," Mrs Chopra says.

"It doesn't matter where you look, you've got cost increases everywhere, and that's what you're seeing reflected here."

She reels off cost increases affecting professional services contractors, and even cyber security and Microsoft licensing fees.

Mrs Chopra says staff have followed the direction given by elected members during an annual plan workshop to tighten budgets without reducing council services.

She believes an "incredible amount of work" has gone into achieving cost reductions within that guidance.

"When we added waters in in February (as in brought it back onto council books after a change in policy direction by the new coalition government), we were talking about a 45.4 percent rise in rates.

"This council is by no means an exception...across the country that's what councils are facing."

Mayor Tim Cadogan is calling the budget, "very honest", while admitting the rates rise associated with it is a "very hard pill to swallow".

"But I'm at this stage satisfied that there's not really much meat left on the bone to carve off, but next year, with the Long Term Plan, we'll be having a very close look at whether our levels of services are right, whether there are things we can be doing...that's going to be a conversation for next year."

The council earlier took the central government up on its offer to push out this year's scheduled Long Term Plan process, which would have set the direction for services and projects for the council for the decade ahead, into 2025.

The mayor says he thinks it is right for this council to not kick the can down the road on spending that should be happening today.

His views have been echoed by deputy mayor and Cromwell councillor Neil Gillespie.

"Short of cutting services, we don't have a lot of options left here, and I think we're going to have an honest conversation with our community and hopefully help them understand why we're proposing what has been proposed," Councillor Gillespie says.

"I'm really looking forward to what feedback we may get, where they may actually say, 'You didn't think of this'. Because I really hope there's something out there that we might have missed. I'd be happy to have that pointed out to us.

"I'd love to say I've found the silver bullet for this (the increasing costs), but I can't."

Councillor Stu Duncan, of the Maniototo ward, thinks the council should be commended keeping costs down, despite the obvious rates rises.

"If 81 percent of our cost increases come from a fundamental part of of job, it's a big pat on the back."

Council business support manager Saskia Righarts tells councillors her team is working to ensure people who need it know what sorts of support they can access to help pay their rates, whether that be rebates or structuring smaller payment amounts throughout the year.

"We are acutely aware this is a huge increase that is going to impact members of our community."

Keen to ask questions of council staff and elected members on the draft annual plan? Drop-in sessions are being held online and in-person, including:

  • In Cromwell on Tuesday, April 30, from 4pm to 6pm at the council's Cromwell Service Centre in the mall
  • Online on Thursday, May 2, from 7pm

Main image: The Central Otago District Council consultation document for its 2024 to 2025 Annual Plan is titled, 'Facing Our Reality', and it will be available to the public on Friday, April 26.

 

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