Councils struggling to fund, deliver services

Dunedin Mayor Jules Radich. Photo: Peter McIntosh/ODT
Dunedin Mayor Jules Radich. Photo: Peter McIntosh/ODT
An inflationary environment colliding with an infrastructure deficit exacerbated budgeting difficulties for councils in the South.

The Gore District Council landed on a 21.4% rates increase, but it chose to not fully fund depreciation in order to keep the rates rise this low.

Gore District Mayor Ben Bell said all councils were in the same boat of dealing with broken funding and finance models while delivering the essentials, such as clean, safe drinking water, sustainable waste practices and good roading.

The Dunedin City Council is again partly funding deprecation, running a deficit so it can limit its rates rise to 17.5%.

Its debt is also set to rise by about $120 million in the next year and Dunedin Mayor Jules Radich has called the council’s path unsustainable.

The council is considering selling Aurora Energy.

The Central Otago District Council approved an 18.3% rates increase and it is one council poised to review service levels before the next long-term plan is adopted.

Councillors were united in being unwilling to run at a deficit or cut depreciation funding and disadvantage the next generation of ratepayers, Central Otago District Mayor Tim Cadogan said.

The Clutha District Council managed to get its rates rise down to about 14% but did so by trimming its planned capital works programme.

"Many of the outcomes are controlled by Wellington and our ability to genuinely make changes, especially to Three Waters projects, has been challenged due to our inability to negotiate under the present structures that prevail," Clutha District Mayor Bryan Cadogan said.

The Invercargill City Council kept its rate rise to just under 9.9% but it is running a deficit and funding for Rugby Park maintenance was withheld.

The Queenstown Lakes District Council’s long-term plan is to be adopted this month and a rates increase of 15.6% was proposed.

"In short, it simply will not be possible to deliver many of the things the community or this council want to within the existing significant financial constraints," Queenstown Lakes District Mayor Glyn Lewers said.

The Waitaki District Council’s rates rise was about 13.4%.

Before this was settled, the council said "inflation, soaring costs and increasingly higher government standards have stretched budgets — meaning we’re already trying to do more with less".

The Southland District Council has yet to lock in its rate increase but a rise of more than 13.6% is likely.

Deliberations on its long-term plan will be held later this month.

Consultation material got to the point immediately by saying "these are challenging times".

"In the past three years, there have been exponential increases in costs ... — from interest, insurances, audit and asset valuations, to day-to-day costs of fixing bridges, maintaining roads, building wastewater and water schemes, simple projects within our communities and more," the draft plan said.

 

Advertisement