Rates hike to be ratified

The Dunedin City Council will next week adopt its long-term plan, including a rates rise of 4.9% next year, and approve an increase in the city's debt of $59.5 million in 2012-13.

Under the long-term budget to be ratified by the council next Monday, changes to city rates for next year include new rating categories for Forsyth Barr Stadium.

Last month, the council scrambled to make savings across all departments, carried over funding and delayed projects to keep within its self-imposed rates rise cap of 5%.

That was maintained in the face of multiple financial challenges, including having to cover financial losses by the council-owned company running the stadium and drops in dividends from other council-owned companies and funds.

Councillors will also give authority to the council chief executive to drawn down $59.5 million of new loans in 2012-13, mainly to pay for large ongoing projects, including the Dunedin Centre upgrade, the Otago Settlers Museum redevelopment, the Tahuna wastewater plant upgrade and Logan Park redevelopment.

About $17 million of debt will be repaid in 2012-13, bringing the council's gross debt level to $274.5 million, well above its self-imposed target of $200 million.

The long-term plan to be adopted indicates the city's debt in 2012-13 will be at its highest, gradually reducing to below $200 million by 2021-22.

About $2.7 million of the debt raised will be to lend to ratepayers for earthquake-strengthening and housing retrofitting, with the debt repaid by targeted rates over 10 years.

All loans will be borrowed from Dunedin City Treasury at an interest rate of 7%.

- debbie.porteous@odt.co.nz


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