LOCAL DEMOCRACY REPORTING
Rate increases would need to be about three times what was planned if the council is to do everything it intended for the year, a report says (file photo).
The Ōpōtiki District Council would need to raise rates by about 15% to carry out the activities it outlined in its long-term plan two years ago.
In 2021, when the multi-year plan was adopted, the rate increase for the 2023-2024 fiscal year – effective July 1 – was estimated at 4.97%.
Inflationhigher living costs and increases in licensing fees have contributed to the rise in rates.
There are also increased costs due to gaps in board performance that are highlighted in the 2021-2022 audit report. These include an increase in the staff required to fill these gaps, higher personnel costs, and more research and planning.
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The council is currently developing an annual plan to be made public in early May and adopted by the end of June. The plan states which activities the municipality will undertake during the 12 months from 1 July and how these will be financed.
Four workshops were held with elected members between December last year and early March, and notes from three of these workshops are expected to be available to the public shortly on the municipality’s website, by looking in Meetings and Committees/Agendas, minutes, notes and by selecting workshops and the correct month. At the time of publication, only the December meeting notes were available.
The issues are also set out in a report from Peter Bridgwater, group manager of the council’s Finance and Corporate Services, which was received at Tuesday’s council meeting.
He said municipalities across the country were in a similar position to face significant rate rises in the coming year ranging from 6% to 13%simply because it costs more to do the same thing right now than it did a year ago.
Most municipalities wanted to reduce services to basics so as not to put even more pressure on households that were already under financial pressure.
Bridgwater recommended that the council undertake a robust community engagement process with an information document explaining the changes.
“We are not alone in this. Every municipality is dealing with these changes and responding to them in different ways,” he told councilors at Tuesday’s meeting.
Some of the ways municipalities attempted to make up for the shortfall included rate increases, increases in fees and charges, taking on more debt, asset sales, operational savings, and service level cuts.
“Unfortunately, we don’t have the reserves or assets we could potentially sell as some other municipalities have, so the range of decisions we can consider is a little more limited than in other places,” Bridgwater said.
His report pointed to other cost-cutting methods the council was already using, such as not funding asset depreciation, allocating funding to functions where appropriate, moving maintenance budgets between activities to where it is most needed, moving to cheaper software alternatives where appropriate and developing an information and communications technology strategy to aid in long-term savings.
Councilor Steve Nelson said there is “a lot of pain out there”.
“So we just have to be careful with the rate… It’s hard because it probably proves that municipalities have always been pushing things forward while trying to keep rates down. At some point we will have to spend some money, but this is probably not the year to do it.”
Mayor David Moore thanked Bridgwater for his report.
“It’s hard to read. It’s not like we’re not doing our best to get this [rates rise] down, but we can’t drastically reduce services. It is not an easy task, but we will do our very best.”