ORC spending plan spells rates rises

Photo: ODT files
Photo: ODT files
Rates hikes are likely as the Otago Regional Council unveils a $60million spending programme for the next financial year.

That would be more than $9million more than last year and a $17.7million increase in spending on long-term budgets.

Big-ticket items include subsidised public transport in Queenstown, a legislated increase in civil defence and emergency management spending and more work on the council's water plan.

If adopted, general rates will rise between $2 and $13 per property, based on rising capital values - with Queenstown Lakes ratepayers facing the biggest increases.

Plus, the council wants to introduce a $25.89-per-property uniform targeted rate in the next financial year to cover the $2.4million bill for employing civil defence and emergency management staff.

To help pay for its increased workload, the council has flagged it will demand a $1.5million special dividend over the next two years from Port Otago.

Council chairman Stephen Woodhead told the Otago Daily Times some of the changes were legislative, such as civil defence transitioning to a regional structure.

Other spending was responding to community needs, such as bringing forward by a year the review of public transport for Queenstown.

``It's a cumulative number of things. We're reacting to either legislative or community requests for more action.''

Finance and corporate committee chairman Doug Brown said in a statement the council tried hard to balance the proposed rates rises with the community's desire to see more done in the region.

According to yet-to-be-ratified consultation documents, general rates rises could be:

• $9 for a $290,000 Dunedin City property, to $51.60.

• $13 for a $540,000 Queenstown Lakes property, to $75.25.

• $5 for a $375,000  Central Otago property, to $48.22.

• $3 for a $160,000 Clutha property, to $33.28.

• $2 for a $205,000 Waitaki property, to $36.09.

The biggest budget increases are for transport (up 92% to $22.5million - offset by
subsidies and fares), emergency management (up 354% to $2.4million) and water (up 30% to $9.8million).

Specific spending increases flagged yesterday include $551,000 for rural water quality environmental risk assessments, $526,000 to accelerate its minimum flows programme and $600,000 for Queenstown buses.

The council proposes a
mix of increased rates and charges to cope with the increases, as well as dipping into reserves and using Queenstown bus subsidies from the Queenstown Lakes District Council and NZ Transport Agency.

Under the regional council's water plan, rural water quality limits, which come into force in 2020, require landowners to limit E. coli, nitrogen and phosphorous flowing into waterways.

The council plans a three-year programme of environmental risk assessments on rural properties.

By 2019, the council hopes to have set all minimum flows.

The general rate, if approved, will be $7.25million, which breaches the council's financial strategy, which states general rates should not exceed $6.2million and increases should be kept below 6.9%.

Targeted rates, meanwhile, will rise by $4million on the current financial year to $13.6million.

The council has reserves of $58.6million, with $14million earmarked for a new Dunedin headquarters - which will be subject to a special consultative process.

Port Otago has been 100% owned by the ORC since 1988.

In that time it has received a total of $148.9million in dividends.

That included four special dividends, between 2008-13, totalling $17.5million.

The council's draft annual plan will be available in early April, with public meetings held around Otago.

Submissions open on April 3 and close on May 12.

The annual plan will be adopted on June 28.




"To help pay for its increased workload, the council has flagged it will demand a $1.5million special dividend over the next two years from Port Otago."

Demand will they? Perhaps it's timely to remind the Otago Regional Councillors and the Directors of Port Otago that a shareholder may request a dividend, but that directors of a Company under the Companies Act have a duty to act in the interests of the Company, not the shareholder. Thus any request for dividends may be declined without prejudice if it is not in the long term interests of the company. Had the directors of DCHL been so minded over the last few years we would not be in the mess that we are in at the moment.


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