11.56% rates rise plan; borrowing costs cited
NOT content with drama and intrigue at the council table, the Gore District Council is now set to lift rates by more than 10%.
The council said in a release yesterday it was looking at a proposed districtwide average rate increase of 11.56%.
The rise could be blamed on rising interest rates and a tight employment market.
The proposed increase was higher than projections in the longterm plan due to significant social and economic pressures worldwide that had had repercussions in
New Zealand.
Council corporate services general manager Lornae Straith said the inflation rate was relatively steady and the cost of borrowing low when the longterm plan was adopted.
‘‘Some of our interest rates were below 2.0%. Today we are looking at an average interest rate of 4.26%,’’ she said.
The council would need an extra $900,000 in rates funding in the coming financial year to service its loans at the higher interest rates, she said.
Personnel costs were the other main driver, adding 5% to the rates. The higher staff costs were indicative of the tight employment market and the need to ensure appropriate staff numbers to meet levels of services.
Overall, the council is budgeting to collect an additional $2.29 million in rates in the 202324 financial year.
To keep the rates increase down, the council would consider increasing fees and charges for some services.
One area was waste disposal fees at the Gore Transfer Stations.
Using rates to cover this increase would add 1.32% to the 11.56% proposed rates increase.
To avoid this, the council would consider increasing transfer station fees by 30%, which would place costs with the user and encourage waste minimisation, Miss Straith said.
Delaying the rollout of a new kerbside recycling service was another option to keep the proposed rates increase at 11.56%.
‘‘Any delay will allow the council to collaborate with its WasteNet partners to explore efficiencies across the region.’’
Rolling out a threebin kerbside service at the start of 2024 would add just over 2% to the proposed rates increase, she said.
Meanwhile, the council is likely to appoint former journalist and Wellington law firm partner Linda Clark to undertake a review of the Gore District Council in the wake of recent issues.
Council acting chief executive Rex Capil said the overall objective of the review was to reset, rebuild, reconcile and redeem.
‘‘It is also important to note this is a review to provide recommendations to move forward and not an investigation to determine findings of fault,’’ he said.
Ms Clark was an experienced adviser, risk assessor and strategist, Mr Capil said.
He estimated the review would cost $130,000.
The appointment of Ms Clark and the confirmation of the annual plan will be considered at a council meeting next Tuesday.