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A projected loss of $3.5 million of operating surplus at the Green Island Landfill will affect rates next year, the Dunedin City Council says.
The council says it needs a 6.5% increase in the rates take next year to maintain levels of service and deliver a balanced 2020-21 budget.
An overview of the draft budget, published yesterday, said a rates increase of 4.3% would maintain existing levels of service but a further 2.2% increase was required to offset the losses at the landfill.
"There are no changes to levels of services proposed in the draft budget. However, maintaining existing levels of service in a growth environment presents new challenges, which need to be addressed.
A review of service levels would be incorporated into the development of the next 10-year plan, a report to be tabled on Wednesday said.
"There have been significant changes in Dunedin since 2018.
"The population is growing at a faster rate than previously planned for, with Dunedin now being reclassified as a medium-growth city.
The report said building activity was increasing and house prices had risen sharply, as had demand for rental accommodation and social housing.
"These pressures are anticipated to continue, intensified by major projects in the city like the Dunedin Hospital rebuild."
The 2020-21 draft budget includes operating spending of more than $321.125million.
It shows overall rates revenue increasing by $10.241million.
The Local Government Act 2002 requires councils to have a balanced budget.