Councillors divided over proposed rates rise

The prospect of a 6.5% rates increase in Dunedin to follow this year’s 9.8% rise has been called unsustainable.

Cr Lee Vandervis — also a critic of the Dunedin City Council’s escalation in group debt — said the rates increase for 2022-23 should be much nearer to the June 2021 local government cost index rise of 1.4%.

The council should rein in spending, he said during annual plan budget discussions yesterday.

Several of his colleagues did not agree.

Cr Steve Walker said the council should be bold and continue to invest in the city.

‘‘Now is not the time to retrench,’’ Cr Walker said.

Cr Marie Laufiso said there was no need to panic or restrict the council’s programme ‘‘for what might be a temporary blip’’ in response to Covid-19.

Councillors yesterday adopted draft operating budgets that are the basis for discussion about 2022-23 spending.

A projected total rates rise of 6.5% is down from the 7% increase that was last year forecast for the second year of the 2021-31 long-term plan.

The council is also expecting a dividend of $5.5million from the Dunedin City Holdings Ltd stable of companies.

The local government annual inflation figure cited by Cr Vandervis as a useful benchmark was from June last year and inflation has surged since.

Ongoing uncertainty resulting from the Covid-19 pandemic, inflationary pressures, strain on supply chains and expected rises in interest rates are among issues council staff and elected officials have attempted to account for in the budgeting process so far.

Dunedin Mayor Aaron Hawkins said the draft budgets for 2022-23 were in keeping with what had been approved in the 10-year plan.

That includes $1.5billion of planned capital spending for 2021-31, much of it to upgrade or fix ageing infrastructure, such as water pipes.

The broad aim now was to give effect to the next year of that plan.

Cr Carmen Houlahan said she hoped the council could keep the rates increase down to 5%.

Cr Sophie Barker said it was difficult for councillors to back rates rises when people had not received pay increases.

‘‘Our duty, I guess, is to take the city forward.’’

Deputy mayor Christine Garey said the times were challenging, but she advised elected officials to remain courageous.

Cr Jules Radich said the projected rates increase was relatively high.

A proposed programme will be approved by elected officials for public consultation and feedback will be considered in May, before the final version of the annual plan is adopted.

Cr Andrew Whiley said he wanted residents to have their say.

‘‘The community are going to have a voice in this.’’

The meeting was held over audiovisual link.



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