Proposed rates rise for city 2.99%

The council's financial strategy has set a limit of 3% on rates rises unless there are '...
The council's financial strategy has set a limit of 3% on rates rises unless there are ''exceptional circumstances''. Photo: ODT

Dunedin residents are facing close to a 3% rates rise this year, with early warnings ''hard decisions'' will need to be made next year.

The Dunedin City Council will sit to consider its budgets for the 2017-18 year on Monday, but any of the new councillors elected last October with plans for new initiatives may have to put those ideas on hold.

After three months of staff work to put together the draft budget, which will go for public consultation in May, the proposed rise is 2.99%.

Dave Cull.
Dave Cull.

The council's financial strategy has set a limit of 3% on rates rises unless there are ''exceptional circumstances''.

The result, a report to the meeting said, was ''no wiggle room'' left in the budget.

''If we want to add anything new to our work programmes, we will need to reduce our spend elsewhere.''

The report also raised future problems for next year's budget.

While the cost of the management of maintenance contracts - it was discovered for instance after the 2015 South Dunedin floods mud-tanks were not being properly serviced - would not affect this year's budget, ''hard decisions'' would have to be made next year.

Mayor Dave Cull said many maintenance issues had been discovered during a review of all council activities that began about six years ago.

''As we've gone through we've discovered things like a need for more maintenance in some areas.''

Mr Cull said changes to contract supervision since then had come at a cost.

''When we did restructure the contracts they cost more, because we were actually having to pay for the work we wanted done.''

There were other areas, in interest rates and debt, where the council had made some savings.

Asked if the problems uncovered last year at council-owned companies Delta and Aurora would come at a cost to ratepayers, Mr Cull said there had not been any financial request from the council's holding company, Dunedin City Holdings Ltd.

There could be in future, he said.

Council chief executive Sue Bidrose said it was ''business as usual'' but there would be discussions about the issue in the next 18 months.

Mr Cull said any discussion would take place ''transparently and publicly''.

The report to Monday's meeting said Dunedin rates were in the lower quartile compared with other councils in New Zealand.

Mr Cull said there was a tension between providing affordable rates and providing ''optimum services to the community''.

Asked whether the 3% cap on rates rises was sustainable, Mr Cull said over the past 20 years the average local government cost index - the extra it cost councils each year to provide services - was 3%.

''If you wanted to stay where you were in terms of the quality of your services, and if you were operating efficiently, then you would expect your rates to go up 3% every year to hold the line.''

Mr Cull said he ''pretty much'' wanted to stick to that.

But he wanted the community to understand if it wanted more of anything, or something new, it would mean an increase on 3%.

''If you want a dozen more public toilets, well, it will be on top.''

It was more transparent if people understood that, and better than in the past when ''the rates increases would just go up and down each year''.

''I find that really unsatisfactory, and I'm sure the community does.''

With the draft plan bringing the rates rise to 2.99%, Mr Cull said he did not know if the increase would stay under 3%.

Both windfalls and extra demands on the council's finances could come out of the woodwork.

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