Rates cap too high, mayor believes

Waitaki Mayor Alex Familton wants to revisit a rates cap which would restrict Waitaki District Council rates increases over the next 10 years.

For the first time, the council has had to put a cap on annual rates rises as part of its 10-year long-term plan, which it will formally approve at its meeting on Tuesday.

The cap it has set is the Cost Price Index (CPI inflation) rate plus 5%, which Mr Familton feels is too high.

He indicated to the Otago Daily Times yesterday he felt the rates cap should be "around CPI", but emphasised that was his personal view, not the council's.

The council will on Tuesday consider a notice of motion from Mr Familton to review the rates cap during the next financial year as part of its financial strategy, so it can become part of the public consultation on the 2013-14 draft annual plan.

The council had about 500 public submissions on the draft 2012-22 long term plan. North Otago Federated Farmers commented on the rates cap.

Asked if the rates cap issue had been overlooked because of other issues in the long term plan, Mr Familton did not agree.

He said if submissions were read closely, "a vast number" commented on the affordability of rates, the need to cuts costs and control spending.

Many also referred to the current economic recession and the impact of rates.

"People indicated in a variety of ways [the need to control spending] and we need to give the public some direction and go back and consult," he said.

The long-term plan had an average annual 3.6% rates rise over the next 10 years, so Mr Familton felt a rates cap around CPI was achievable.

That was also supported by the rates rises the council had managed to achieve over the past four years.

"We are in the formative stages of setting a rates cap," Mr Familton said, referring to the fact this was the first time the council was required by Government to do this.

"Our first effort does need to be reviewed."

While the first cap had been set as part of the long-term plan, Mr Familton said it could be reviewed outside of that. It was part of the council's financial strategy, which could be reviewed then altered at any time.

However, he wanted it as part of the annual plan process next year, so people would have the chance to make submissions.

"This is rather a bigger issue, so I have put in a notice of motion so we will consult."

Having settled the long-term plan and many elements in it, the council needed to review the rates cap separately.

- david.bruce@odt.co.nz


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