Following deliberations on the council’s 2024-25 annual plan yesterday, Central Otago District Mayor Tim Cadogan confirmed to the Otago Daily Times he had, during drop-in sessions on the annual plan, suggested reverse mortgages could be used to pay for the rates increase.
His suggestion was slammed by two submitters, one labelling it disturbing and the other saying it showed elected members were out of touch.
Reverse mortgages allow older homeowners to borrow against the value of their home, the loan being repaid when the homeowner dies.
Mr Cadogan said he had tried to offer a practical solution to ratepayers, given the present financial climate.
"There were a number of times at drop-in sessions ... when pensioners explained to me the impact that these increases, alongside all the other financial challenges that they are facing, could lead to not heating their homes or cutting back on food.
"I tried to be practical in responding to the situation these folk feared they would find themselves in and said, as a last measure, to meet the cost-of-living crisis they are facing, including the projected rates increases, they could consider reverse mortgages."
While the suggestion was unpalatable for some, many people were "asset rich and cash poor".
"Suggesting utilising some of that asset to make their lives better, to avoid cutting back on heating or food was, I feel, better than offering empty sympathy."
Two submitters touched on the comments made at drop-in sessions by Mr Cadogan during deliberations in Alexandra yesterday.
Former MP Gerry Eckhoff said he could not believe Mr Cadogan had suggested reverse mortgages.
"I’ve also heard, and it’s very disturbing Mr Mayor, that you’ve actually ... suggested to some ratepayers — and I can’t believe this is true — that reverse mortgages are a good way to pay for your rates," he said.
Submitter Trevor Goudie said the suggestion showed "elected members have lost touch with reality".
Mr Cadogan did not respond to the comments during the meeting.
Councillors heard 13 verbal submissions and considered over 150 written submissions on the annual plan.
At the meeting, council chief executive Peter Kelly said the average proposed rates increase was about 18.4%, down from 21.4% as proposed in the draft annual plan.
However, he accepted 18.4% was still a "terrible position to be in".
