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Southland District Council ratepayers will be facing a 9.25% rates increase for the 2022-23 year after the council moved to accept the finance and assurance committee’s recommendation.
The council had previously assessed the rates to increase by 8.31%. However, the additional increase had been proposed because of higher interest being paid on the council’s capital works loans.
The almost 1% increase would harvest an extra $500,000 towards the total $59.2 million rate take.
In March the council had proposed a 9.22% increase but opted to increase this to 9.25% after the Northern Community Board decided to establish a northern pool rate.
But the 9.25% increase would only be an average across the region. The council expected rates increases would vary across the district and would depend on factors such as the location of properties, supplied services and how a rating value had changed based on the QV valuations released earlier this year.
Southland Mayor Gary Tong said the council was "between a rock and a hard place" committing to upgrading ageing infrastructure at a time when many were feeling the pinch of rising prices.
"We’re conscious that price increases people are already facing does make a rate increase a tough proposition,” Mr Tong said. "Those costs are increasing for council as well.
"We need to keep in mind that our people let us know pretty clearly during our long-term plan process that they wanted us to do better with our services and roads, and we agreed with them.
"We couldn’t keep kicking the can down the road any longer, trying to keep rates low in the short term at the expense of infrastructure which was in need of replacement.”
The council had tapped into its $1 million strategic asset reserve to reduce ratepayer burden while still achieving roading increases, matched by Waka Kotahi funding.
Cr Ebel Kremer said at the committee’s June 15 meeting, the council was not delivering on the long-term plan at present because "external influences" such as higher interest rates..
He had requested a budget from council which had limited rate increase and met the long-term plan.
"They [staff] will provide services, asset committee a report in the near future and look at some of the priorities we will need to do to try and stay within the financial envelope for the next financial year and clearly identify what projects we may have to discard or reprioritise."
"We still need to live within that financial means."
By Toni McDonald