The most challenging environment the Waimakariri District Council has "ever faced" could lead to an average rates rise as high as 6.9 percent.
Economic uncertainty and inflation at its highest level in 30 years was placing significant pressure on the council’s budget, acting chief executive Jeff Millward said in his opening address to the council’s 2023/24 annual plan deliberations on Wednesday.
"There are no significant changes to what we signalled in the 2021/31 Long Term Plan, but the underlying numbers are under pressure, so we feel there is a need to go out for consultation."
The Waimakariri District Council has enjoyed the lowest rates rise in Canterbury for the last two years, at 4.5%.
But the economic realities and expectations on the council meant Mr Millward, who is also the finance and business support general manager, started out with a whopping 14.4% rates rise.
He alleviated some pressure by recommending the council not fund depreciation for asset replacement this year, to get the average rates rise down to 6.9%.
By deferring earthquake loan repayments and further cost cutting, Mr Millward said he could get the average rates rise below 6%.
But neither were long-term strategies, as pushing out loan repayments over a longer period would incur higher interest rates, he said.
By not funding depreciation, the council would have less reserves to fund asset replacement, which could force the council into more debt in the event of a natural disaster, such as an earthquake.
The councillors were due to debate the scenario of deferring earthquake loan repayments during their deliberations.
Mr Millward said he expected the district’s rapid growth to begin slowing down over the next decade.
The district’s population has passed 67,000 and is projected to reach 78,400 in 2031.
Deliberations were due to be completed tomorrow.
The council will meet again on February 28 to approve the draft annual plan ready for consultation from March 10 to April 17.
Mr Millward recommended the council consult on investment, the costs of keeping urban water supplies chlorine free, stormwater updates, contract inflation, and depreciation and earthquake funding.
The consultation document would also provide information on government reforms, climate change and sustainability, community facilities, rubbish and recycling, the Canterbury Museum and the Christchurch Stadium.
"We still haven’t had any formal requests to contribute towards the stadium, but there has been a lot of talk about it," Mr Millward said.
- By David Hill, Local Democracy Reporter
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