Rates hike means tough conversations
Asubject of much conversation, rates increases are an issue that communities around the country are grappling with. Often considered to be due to council’s focusing on ‘nice to haves’, a new report from Local Government New Zealand highlights a real pressure is the increase in costs for critical infrastructure works.
Analysing increases in local government costs (prepared by Brad Olsen of Infometrics) lays out the hard reality that between 2021 and 2023 inflation and cost increases dramatically raised the cost of construction. For instance, it costs approximately 30 per cent more to build a sewerage system than it did at the start of the decade and bridges are 38 per cent more. While inflation and additional costs are factored into projects, these far surpass the estimated increase.
Operating costs too have seen an increase causing further challenges. Labour cost inflation is more than double the pre-pandemic average, and interest payments up 64 per cent on pre-pandemic levels.
For councils around the country that have already planned and scheduled work, often with tight budgets, these increases mean hard conversations and decisions.
Unfortunately, Kā piti is one of those areas impacted, with projected rates increases of 17 per cent, or 12 per cent if we rely more heavily on debt. We’re acutely aware of the challenges households and businesses are currently facing, so we’ve been taking extra time to scrutinise our spending and strike a balance between paying off debt and keeping rates rises as low as possible in future years.
Council has critical work programmes under way that will shape our district in the coming decades. From water and sewerage pipe renewals to erosion control and roads, these are essential for our Kā piti to thrive but come with increasing costs. As we head towards our Long-Term Plan KCDC is releasing its consultation document on March 28, with more information in the council meeting agenda available on the council website on Friday.
Finally, it was sad to hear of the passing of Graham Priest, long-time presenter on Coast Access Radio. His contribution to informing the community on issues of the day, as well as creating a repository of information about local people, was enormous. He will be missed.