Rate hikes on the table
Environment Southland is proposing two rate rise options to deal with rising compliance costs:
16 per cent or the preferred option of 20 per cent.
Chairman Nicol Horrell addressed media yesterday and said it was the biggest increase proposed in his time with the regional council.
‘‘In dollar terms it’s not huge, but we know it’s a big rise,’’ he said.
The loss of operating income from activities such as cruises (which account for $2.8 million a year, or
10 per cent of the council’s income), coupled with increased compliance costs, meant Environment Southland needed to increase rates or take on unmanageable debt, Horrell said.
The proposals form part of the council’s 2021-31 Long-Term Plan draft consultation document, which is expected to open to public feedback from Tuesday.
The two options will help fund the council’s work programme over the next three years.
The first option is a one-off 20 per cent rates increase, followed by a 5 per cent increase each year for the next three years. This would allow Environment Southland to incur a maximum debt of about $7.5m, which could be repaid by the end of 2028.
The second option of a one-off 16 per cent increase, along with 5 per cent increases for the next three years and 4 per cent thereafter, would mean incurring a debt of $10m that could only be paid back by the end of 2031.
Practically speaking, someone who lived in a home worth $320,000 in Invercargill would be paying $63 a year more under option one, or $52 more under option two.
A 117-hectare dairy farm worth $5.3m would be looking at increases of $394 or $292 for the year.
The council will offer a rates calculator on its website from Tuesday.
Environment Southland’s priorities for the coming years include implementing the Government’s Essential Freshwater reforms, with further impacts anticipated from the Three Waters reforms and updates to the Resource Management Act. Another was building climate resilience.
While the council had secured shovel-ready project funding for floodbanks throughout the region, it needed to contribute 25 per cent, or $4.8m.
‘‘It’s a lot of money to find,’’ Horrell said, adding that the council was obligated to protect private property in the event of flooding.
The council had been dipping into reserves to pay for costs, he said, but this was unsustainable, and he preferred not to saddle future generations with debt.
Chief executive Rob Phillips said without the increase, Environment Southland would have to drop some services.
The council was busy with a programme of work to identify cost-saving measures, Phillips said.
Horrell admitted the council had turned down a higher proposal of 24 per cent. ‘‘The council’s been over everything with a fine-tooth comb. But at the end of the day, we have a job to do, and the options aren’t great.’’