Otago residents face 16 percent rates rise

The Otago Regional Council has adopted its new Long Term Plan today - and with it a 16.3 percent average rates rise in the year ahead.

Rates rises of 13.8 percent and 8.7 percent will follow in the two years after.

The vote was not unanimous, with three councillors refusing to support the adoption of the proposed plan, which details the council's spending priorities and levels of service for the next ten years. 

Dunstan councillors Michael Laws and Gary Kelliher both opposed the rates rise, while Alexa Forbes supported it.

In a statement announcing the decision, chair Gretchen Robertson says the plan has a “significant focus” on public transport and large-scale environmental projects.

She says the rates increase "was necessary" to fund these initiatives, but public feedback to initial proposals "helped shape" the end document.

The Long Term Plan was prepared in consultation with communities across Otago at meetings and online forums, and more than 400 submissions were received on it.

Refining has marginally softened the blow to ratepayers in the first and third years of the ten year plan, when rates rises were originally flagged to be 18.6 percent and 9.4 percent, but has resulted in a jump in year two from an original 11.2 percent.

The statement by the council says the rates increases were driven by the need to pay back historic transport deficits arising from increased costs in response to Covid related challenges, general increases in the cost of delivering public transport services to Otago’s communities, inflation impacting all council spending and an increase in the amount of funding for environmental projects, which will commence from year two of the Long Term Plan.

The Long Term Plan also makes some changes to how rates are calculated across the region.

Councillor Robertson says 10 different rates were considered for changes so that rates can be “more fairly applied”, to have a more workable, transparent, and understandable process.

“The changes won’t impact on the current level of services we’re providing, it’s about how the work programmes are funded and who pays for them,” she says in the statement.

She acknowledges the current cost of living pressures facing residents and ratepayers - saying that came through in the consultation process -and applying fairness across the rating system in response was important.

“We appreciated the community’s engagement and, following that feedback, we’ve made changes to some proposals while others will proceed as planned. In areas like flood and drainage schemes, we’ll undertake further work to better understand the impacts of rating changes more comprehensively,” she says.

“A significant highlight of our plan, which many ratepayers backed is new ($2m) funding for large-scale environmental projects supporting community-led environmental work across Otago, focussed on on-the-ground environmental enhancement and fostering strong, connected communities."

Improving public transport in Dunedin and Queenstown and exploring the possibility of new services for Ōamaru, Alexandra, Clyde, Cromwell, Balclutha, and Wānaka, was also a key part of the council's strategy for the next decade, she says.

“Enhancing public transport connects communities by providing reliable and affordable options and helps preserve our environment by reducing emissions and congestion."

Speaking before today's vote, Councillor Laws said he had not voted for an annual or long term plan of the council's in the past three years.

Councillor Laws said the council "seems curiously misaligned from the community it purports to serve" and particularly in the current climate of financial restraint is out of step with most of its ratepayers when it comes to spending.

However fellow ward councillor Alexa Forbes said while during consultation on the plan concerns were expressed about the cost of living crisis, concerns were also expressed about the state of the environment.

She said people look to the ORC for a "framework" from which these concerns can be addressed.

Councillor Forbes voted in favour of adopting the plan has proposed.