Clutha rates see massive increase

Photo: ODT files
Photo: ODT files
Clutha ratepayers can expect compounded rates increases of 49% to 80% during the next three years.

The figures — which are provisional, but unlikely to change significantly — emerged during a Clutha District Council meeting last week, in draft long term plan (LTP) documentation provided to councillors before its submission to auditors.

Some ratepayers attended last week’s meeting to express their concerns about a revised 25% rates cap announced recently by the council.

For the past several years, the council has been one of the better rates performers in the country, successfully holding a rates cap of 4%.

Although only a handful of towns in the district are expected to approach the new cap — during the 2025-26 and 2026-27 financial years — most towns’ figures sit around the 15% mark for next year, and compound over the three years to total increases of between 49% and 80%.

Waihola received both the highest single-year increase of 25.06% in 2026-27, and the highest three-year compounded increase, of 80%.

The council documentation also provides illustrative figures for equivalent dollar rates increases on an average property in each town.

In Waihola, the surge in rates between now and 2026-27 would entail an increase of $2144.44 on this year’s rates of $2678.51, to $4822.95.

In Balclutha, which has the highest average property rates included in the documentation, rates would increase by $2077.13, to $5090.74 in 2026-27.

Residents in second largest town Milton could expect to be paying an average of $5123.54 in the same year.

Accounting for the jump in rates, the council provides some explanation in its draft long term plan consultation document.

In a section entitled "Facing the Facts, The Rates Reality", the council says Three Waters are a major cost driver for the increases.

"[O]ur financial risk has always been having the third largest roading network and the third largest reticulated water network in the country with only a limited number of ratepayers. Our historic approach is no longer sustainable and with the recent changes to three waters reform this council for the purposes of this LTP is going it alone. The proposed significant rates increases reflect that.

"The reality of our previous decisions and investment in infrastructure means some dramatic increases for the future.

"We have unavoidable cost drivers particularly for water, sewerage and stormwater, that will affect ratepayers who receive these services.

"We decided to bring three waters operations in house from July 1, 2023. The transition costs associated with this move including increasing the size of the workforce, in conjunction with new drinking water standards introduced in January 2023, have resulted in higher costs of operating and providing three waters services and greater investment in three waters infrastructure. In this LTP 2024-34 we are budgeting $328 million over 10 years for three waters operations and $282.7m over 10 years for three waters infrastructure investment."

Public consultation on the long term plan begins on March 28.