Central Otago residents are facing a 10.4% rates rise as the effects of inflation start to bite.
Increases to insurance renewal premiums, the revaluation of council property and waste management assets pushing up depreciation expenses were some of the rising costs the Central Otago District Council was having to navigate as it looked at its draft budget for the 2023-24 annual plan.
A rise in compliance costs had impacted council-run operations such as pools and waste management, and remuneration of elected members had increased $110,000 on instruction from the Remuneration Authority.
A report to the councillors said the draft budget had been prepared in keeping with a request from the council to keep the three-year long-term plan budgets relatively unchanged, with the exception of "known unmanageable inflationary increases".
At a meeting on Wednesday, chief financial officer Susan Finlay said the long-term plan had factored in a 7.6% annual rise in rates.
However, that figure had been adjusted for a predicted growth factor of 1.9% in the draft annual plan budget.
She noted community boards were yet to review their ward budgets.
Mayor Tim Cadogan said the council was maintaining what it committed to under the long-term plan, but there were now "inflationary costs and things".
The only new item was the proposed new roof for Ice Inline, which the Vincent Community Board had considered, he said.
Cr Tracy Paterson asked if a margin had been built into the budget to cover for unexpected cost increases.
"Are we working directly to costs, or have we got contingencies built into some of these things so that we know if there is over-runs, given what we would talk about on a regular basis?"
Ms Findlay said contingencies were factored into particular projects.
However, it was a "very fine line" when it came to operational cost.
"It’s a balancing act and we just need to be mindful, I guess, if things do go wrong, or inflation goes up."
The draft budgets will now be presented to each community board for consideration.
Pending approvals, the final budgets will be presented back to the council on March 30 for approval to consult with the community.
