The council voted to delay its long-term plan (LTP) for a year at last month’s council meeting, and instead will develop an annual plan for the 2024-25 year and a nine-year LTP, instead of the usual 10.
At a public workshop on Wednesday, Cr Martin McPherson said it was critical ratepayers understood the proposed rates rises came from the increased cost of day-to-day operations.
"It is business as usual ... as a business we have faced some incredible cost increases," Cr McPherson said.
Council chief executive Peter Kelly said the proposed figures in the annual plan were equivalent to an $11million rates rise.
"Council staff have worked hard-to-find savings of about $10million within the proposed budget across all areas of council, but unfortunately these remaining costs will leave council with little choice but to pass them on," Mr Kelly said.
Speaking after the meeting, Central Otago District Mayor Tim Cadogan said the draft annual plan included an average rate increase of 24.29%.
For a household paying $2500 a year in rates, this would mean an increase of $619.21 in the next year — just under $12 a week.
Mr Cadogan said, like every other council in the country, the council was feeling the effects of a perfect storm of unavoidable cost escalations.
"In the last three years [since the last LTP budget was prepared] nationwide, sewerage systems are 30% more expensive, and roads and water supply systems 27% more expensive to build."
Other factors were increased costs such as interest, audit, insurance and power, he said.
"The council is also being impacted by significant cost increases in the Three Waters space, with the drinking water budget showing a 42% increase and the wastewater operating budget of $820,000 being a 94% increase."
Energy and insurance costs accounted for a further 2% rates increase, Mr Cadogan said.
"We have no choice but to pay for energy and it would be imprudent not to pay insurance, so there is no option but to pass these costs directly on to rates."
Staff would be reviewing and revising numbers ahead of a formal report going to the council’s April 24 meeting.
Formal consultation of the annual plan would be in May.
Details of where to give feedback will be made public following the April meeting.
