Invercargill rates to rise two per cent
The Invercargill City Council has signed off on a proposed rates increase of 2 per cent.
All councillors voted in favour of the recommendations for the rise at a council meeting yesterday.
Prior to the Covid-19 pandemic, rates were proposed to rise by 3.5 per cent for the next financial year and by five per cent for the following two years.
This equated to a rate rise of 13.5 per cent over three years.
Council finance and corporate services group manager Dave Foster said a zero per cent increase in rates was not proposed because of capital spending and borrowing.
As the council could borrow at 2.5 times its rates revenue, a loss of $1 million in projected rate revenue would equate to
$2.5m less it could borrow to be used towards capital investment projects.
Those projects were important to Nobby Clark re-start the economy, Foster said.
If the council adopted a zero increase in rates it would potentially lose $16m it had planned to raise for its 10-year capital works programme, estimated to cost $100m.
Capital work would be funded by debt rather than rates, so it was important to keep balance, Foster said.
The final figure of two per cent was a significant reduction in the previously suggested rate increase, he said.
Currently, the average rate fee per person for a year was $2150. Foster estimated the rate rise would equate to an extra $42 per year. Invercargill Toni Biddle City Council deputy mayor Toni Biddle said the decision showed brave leadership because there was community interest for a zero per cent rate rise this year.
Invercargill City councillor Nobby Clark said he fully supported the two per cent increase after initially advocating for a zero rates rise.
‘‘I think a modest rate increase, which seems to be at the lower end of what other councils are doing.
‘‘It is the way forward and doesn’t undermine our ability to some project work in the next two to three years.’’