"We have to be brave enough to face the facts and inform the community of the situation we’re in," Mr Radich said as the Dunedin City Council reflected yesterday on a projected rates rise of 17.5%.
"We have to have that increase in income to be able to fund what we’re doing — what needs to be done."
He acknowledged such a rise would not fully fund all the work, as some depreciation would not be covered and a deficit loomed, and debt would increase.
Council budgets have been prepared against a backdrop of inflationary pressures and high interest rates, and a revamped rubbish and recycling kerbside collection service is a significant component of the budgeted rates increase.
The other big pressure point is meeting water and wastewater obligations, which are causing a strain on councils across the country.
Mr Radich said deferring necessary work was no solution.
"Pipes and plumbing are out of sight, and the price of maintenance can seem too much," he said.
"Now that a survey of our network has been completed, it is apparent that extensive expenditure is required."
Mr Radich said issues had been identified and the council had a duty to proceed with fixing them.
"We cannot ignore what we have found out."
He also observed the overall transport budget had been trimmed by $7 million and staff had worked hard to find savings.
"However, like any business, we cannot slash our way to success.
"We need to increase the income side of the equation."
Mr Radich also said the council needed to "turn the corner" on debt, as it could not afford to "keep increasing debt year after year".
The council voted 13-1 to adopt draft operating budgets for the purpose of community engagement.
It has not yet approved the draft 2024-25 annual plan for public consultation.
Councillors agreed the extent of the likely rates increase was worrying, but they saw little room to move yesterday morning.
The exception was Cr Lee Vandervis.
"What is evident to me is that we cannot wantonly spend our way to success," he said.
"We cannot increase debt by over $100m a year to success."
Working towards a sustainable debt position was not happening quickly enough, Cr Vandervis said.
"We keep spending money that we haven’t got in the face of vastly increased interest costs.
"The time to slash costs is already well past us, and we should be doing it now."
Cr Steve Walker said the council was always caught between a rock and a hard place when defending rates rises, because the public also called for footpath repairs, playgrounds, sound roading systems, stadiums, museums and art galleries, remove wastewater and provide "first-world drinking water that doesn’t make us sick or kill us".
Cr Christine Garey said councillors had to make the best decisions they could for the future.
"It is time for cool heads, colleagues," she said.
Cr Carmen Houlahan said drives in the past to keep rates low meant a catch-up was needed.
"The sad thing is today is that catch-up day for some of it."
Three Waters and the new kerbside collection system together produced a rates rise of 9.8% — and these essentially came from central government requirements, she said.
Deputy mayor Cherry Lucas, who has an accountancy background, said she had looked hard for savings "and I don’t know where they are".
She looked forward to community input.
Cr Brent Weatherall said councillors had "long faces" yesterday and "we cannot continue to fudge rates rises by increasing debt".
Budgeting discussions continue today.
