Council working to balance ‘new normal’ budget

Austerity is not an option is the message as Central Otago grapples with its post-Covid-19 annual plan.

The Central Otago District Council met online — in a first for the council — yesterday to discuss what to do for ratepayers under a "new normal" in the 2020-21 annual plan but made some concessions.

Council chief executive Sanchia Jacobs, told the meeting proposed changes from the "no frills" budget proposed in February, pre-pandemic, would only extend so far in the new environment and that did not mean a zero increase in rates. The proposed 4.9% increase in average rates across the district now sat at 1.1% after some pruning of the pre-pandemic budget and savings, topped up by reserves, totalling some $2.1million.

Ms Jacobs said council faced a "once in 100-year event".

"We have a balancing act and we cannot be all things to all people," Ms Jacobs said.

Council corporate services executive manager Leanne Macdonald referred to her report and said the impact of the Covid-19 pandemic was likely to cause increased financial hardship in Central Otago through job losses and possible business collapses.

"This may result in an increase in applications from the community seeking a rates remission.

"The council’s policy must have enough criteria to ensure the remission is granted to those that are genuinely facing extreme hardship."

The process of approving, or not approving an application had to be transparent and applied consistently, she said.

Council’s current extreme financial hardship rates policy had limited detail on the criteria required to demonstrate extreme financial hardship.

The Government had provided a range of initiatives to support people’s incomes and livelihoods as a response to the pandemic, she said.

They included wage subsidies, working with banks to provide mortgage holidays and providing accommodation supplements administered by the Ministry of Social Development through Work and Income.

Central Otago District Mayor Tim Cadogan said it was clear not everyone would face the average 1.1% increase in rates but the council was still obligated to levy them or risk losing the support of central Government.

Council accepted the report and resolved to finalise changes before it next met next month.

Council savings

$382,000 from swimming pools, carried forward from 2019-20 from savings as a result of pools being closed during the lockdown.

$195,000 of long-term plan consultation costs apportioned over the next three-year period.

$172,000 of detailed seismic assessment costs postponed to year one of the long-term plan (2021-31)

$1 million to be funded from reserves.

These areas are water services costs

$361,000, wastewater costs of $340,000, and waste minimisation costs of $299,000.

$226,000 of rates income meant to replenish the disaster relief reserve of $120,000 and emergency work reserve of $106,000 postponed to 2021-22.

$175,000 reduced grants as a result of reduced budgets; carried forward from unused grants. 

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