City councillors adopted an annual plan which included the increase at the full meeting of the Invercargill City Council on Tuesday.
The increase comprises a 5.52% water services rates increase, and a 7.91% non-waters rates increase.
The council is in year 3 of its long-term plan.
In a report tabled at the meeting council strategy, policy and engagement manger Rhiannon Suter said the rates rise was less than the 8.43% increase forecast for year 3.
Money had been saved by a $100,000 reduction to the Community Wellbeing Fund for one year, a $200,000 reduction of the Built Heritage Fund for one year and the closure of the Wachner Pl toilets, she said.
The council chose not to proceed with bus fare and pool fee increases, as consulted on, which was part of the reason for the slight increase in rates.
Before these decreases in council revenue, the proposed rates increase for the upcoming financial year had been forecast at 6.93%.
The council was expected to return to a balanced budget in year 3 of the long-term plan.
However, changes made last year and the further changes included in this annual plan would push back balancing the books to 2028-29.
Councillors also voted through several changes in the annual plan, including relocating $15,000 from the arts and culture funding to the Bluff Maritime Museum Trust.
The money would cover a shortfall due to the trust no longer getting funding from the Southland regional heritage joint committee, which the council had withdrawn from.
Speaking to the report, council finance and assurance group manager Patricia Christie said it was the first time in five years the council had not consulted on its annual plan.
‘‘We didn’t go into consultation because there was no significant issues.
‘‘The proposed rates increase was lower than what we had outlined in the long-term plan.’’
During the discussion of the report Mayor Tom Campbell said he acknowledged a 7% rise was a lot for people who were struggling financially.
‘‘I think this council, and council staff in particular, have done an enormous amount of work to try and keep it down to that number.’’
