
Central Otago District Mayor Tim Cadogan suggested, during consultation on the council’s annual plan, reverse mortgages could be used to pay for the proposed average rates increase of 18.4% — as "an absolute last option".
Mr Cadogan said he had tried to offer a practical solution to ratepayers, given the financial climate.
"There were a number of times at drop-in sessions ... when pensioners explained to me the impact that these increases, alongside all the other financial challenges that they are facing, could lead to not heating their homes or cutting back on food.
"[I] said, as a last measure, to meet the cost-of-living crisis they are facing, including the projected rates increases, they could consider reverse mortgages."
While the suggestion was unpalatable for some, many people were "asset rich and cash poor".
"Suggesting utilising some of that asset to make their lives better, to avoid cutting back on heating or food was, I feel, better than offering empty sympathy."
Retiree Stephanie Sommers, of Roxburgh, said the proposed rate increases in her area would leave some people in "dire situations".
Rates on a Roxburgh residential property were expected to increase by about 33%.
"It’s almost like heart-attack territory," Ms Sommers said.
She attended an annual plan drop-in session in Roxburgh in early May as well as making an online submission.
She said at the session she asked Mr Cadogan how people in Roxburgh would be able to afford the rates increase.
"That was when he said ‘oh well, they could get a reverse mortgage’."
It was insulting and "callous" for the mayor to suggest ratepayers put their houses on the line, she said.
"[People] save for years to buy their own home and have their little piece of their dream and then to have to put it into a reverse mortgage situation to help the council get out of their nightmare.
"[It is] helping them get out of their debt situation by encouraging us to get in it."
Trevor Gouldie, of Alexandra, formerly a long-term council accountant, submitted at annual plan deliberations last week, where he said elected officials had "lost touch with reality".
Suggesting ratepayers to take reverse mortgages to pay rates was "like using a bulldozer to open a walnut".
A reverse mortgage was a large-scale action which should provide long-term benefit.
"Tim [Cadogan]’s proposing we should do that for short-term benefit ... it’s not good personal management to do that kind of thing.
"I’m surprised people aren’t up in arms, waving placards and screaming from the rooftops."