Worse-than-forecast costs force meeting

Uglier-than-expected interest rates, inflation and insurance costs have required an Invercargill City Council councillor workshop to assess the implications for the 10-year-plan they have just finished consulting the public about.

On top of that, changes to Government policy and funding, such as reduced bus subsidies, will be added to the potentially grim agenda when the councillors meet on April 30.

Depending on the severity of the situation – yet to be specified – the range of options appears to be to reduce services; or to reconsider the size of rates increase (at present averaging 9.17% for the coming year); or to increase borrowing.

A time crunch is adding to the pressure. The council is due to have its plans confirmed and ready for final audit on May 14, for adoption by June 30.

Finance and assurance manager Patricia Christie said on Friday that New Zealand was facing significant economic uncertainty.

The council was not immune to these challenges.

“We are looking for ways to limit the impact these pressures will have on ratepayers and the services we provide, and these options will be provided at the workshop,’’ she said.

The issue was first raised by mayor Nobby Clark at the council’s finance committee meeting last Tuesday.

“We have had some feedback in the last week or so from staff saying insurance, inflation and interest rates are all up more than we thought,’’ he said.

This might push the margins of what the council had planned, he said, and he didn’t want the council to have failed to have consulted on matters it should have.

He asked: “When we hold a meeting to discuss that, and what the options are for us – if we have any – does that open up another round of consultation?’’

Christie replied that “at this stage’’, she did not believe this would be needed.

Chief executive Michael Day said that if the agreed outcome of the meeting would have significant effects on services, “then yes, we would potentially have to go back out’’ with a fresh consultation process.

The April 30 workshop will be livestreamed.