Council warns of significant rates increase
The Central Otago District Council (CODC) has discussed a draft rates increase in the preparation of its 2024-25 Annual Plan in an open workshop this afternoon.
Currently, the draft annual plan sees an average rate increase of 24.29% (taking into account growth of 1.2%), Central Otago District Mayor Tim Cadogan said.
Commenting after the public workshop held in Alexandra (Wednesday 20 March) he said CODC was like every other council in the country feeling the effects of a perfect storm of unavoidable cost escalations.
“Myself and all the other CODC councillors recognise the impact the proposed rate rises will have on people in Central Otago, but we also have to recognise that there are a number of cost drivers that we cannot avoid. These include inflation which for us is far greater than the already high CPI rate due to the increased cost of building infrastructure. For instance, in the last three years [since the last Long-term Plan (LTP) budget was prepared] nationwide, sewerage systems are 30% more expensive, and roads and water supply systems 27% more expensive to build.”
Other factors were increased costs such as interest, audit, insurance and power, he said.
“Our energy cost is expected to rise by around $500,000 from last year to the coming year with our insurance cost going up by around $400,000. These combined add up to approximately 2 percentage points in rates increases alone and we have no choice but to pay for energy and it would be imprudent not to pay insurance so there is no option but to pass these costs directly on to rates.
“The Council is also being impacted by significant cost increases in the Three Waters space, with the drinking water budget showing a 42% increase and the wastewater operating budget of $820,000 being a 94% increase.”
The increases reflected the fact that the cost of business had gone up, and that the proposed figures translated to an $11 million increase in rates, CODC Chief Executive Peter Kelly said. He said he was acutely aware of the impact that this rate increase would have on members of the community.
“Council staff have worked hard to find savings of about $10 million within the proposed budget across all areas of council but unfortunately these remaining costs will leave Council with little choice but to pass them on.”
Staff will be reviewing and revising numbers ahead of a formal report going to the 24 April 2024 meeting. The Annual Plan will then be formally consulted on during May and the community will be encouraged to have their say.
Details of where to give feedback will be made public following the April meeting.
