14% rates hike possible for Southland District
Staff of the Southland District Council have proposed 14% as the “upper limit” of a rates hike for the district in the 2024-25 financial year. However, a decision will not be made until after the public is consulted, and 14% may not be the percentage elected members choose to consult on. A draft financial strategy for the council’s Long-term Plan proposes lifting rates by a maximum of 14% in 2024-25, then by a maximum of 11% for the following two years and by no more than 8% for the next seven years. “This is much more than we have seen in the past,” the strategy document said. The increases were needed because “the day-to-day cost of delivering services has risen, and we want to make sure we are moving closer to balancing our budget by rate funding depreciation rather than borrowing”, it said. The council’s finance manager, Anne Robson, told councillors at a finance meeting on Wednesday that the district had a small population with a large asset base. “We don’t have the benefits of larger cities who are gaining larger populations to contribute towards the cost of infrastructure. It’s a real issue for us.” Since the council’s last Long-term Plan, in 2021, it had endured higher costs including for roading, water services, interest rate rises and increased environmental standards. The council also needed to allow room for emergency events and balance council debt and budgets, Robson said. She highlighted the high roading and water services costs facing the council. Councillors were told that, based on staff assumptions, the combined rates of the district council and Environment Southland would make up 5.31% of the average household’s income in 2024-25, and up to 9% of average household income towards the end of the next decade. This was “not good”, said councillor Don Byars, who advocated for more savings to be made before the final rates figure was set. He was “pretty sure” significant savings could be made in community resources, environmental services, corporate services and community leadership, “if we are really motivated to look at them”. “A lot more has to be done around a strategy that is going to be affordable for the community,” Byars said. He questioned the necessity of investing in stormwater work on certain roads, but a staff member said the council didn’t get brownie points for flooding houses. After the meeting, mayor Rob Scott said the proposed rates figures in the draft financial strategy were a cap the council didn’t intend going above. He said no decision would be made until August, after public consultation, but indicated the final figures may not be far off the proposed maximum increases. “It’s definitely going to be in that teens area based on the inflationary factors we have got.” In the past three years the cost of bridge work had gone up 38%, roading costs had risen by 27%, and insurance and interest rates had increased, he said. “With those factors, we are going to be in the double digits – that’s a given. “Where we actually land, we are not too sure yet. We have to go through the public consultation process and Long-term Plan.”