Clutha District Council met in Balclutha yesterday for a combined workshop and meeting to discuss changes to its long-term plan process, following the National government’s scrapping of Labour’s Three Waters legislation.
On December 13, Local Government Minister Simeon Brown announced the incoming government would scrap the previous legislation, which would have seen regional "entities" take ownership of council water services.
Councils, including Clutha, had begun preparing their 2024-34 long-term plans expecting the removal of water assets, upgrades and maintenance from their books.
During yesterday’s meeting, Clutha District Mayor Bryan Cadogan said the change entailed "serious" consequences for council debt and rates.
"At present, council will breach its debt cap of 175% of revenue in year 4 [2027-28].
"Despite our best efforts [to cut costs] to date, we’re not talking about an 8% rates increase, but 20% increases. This is the real world.
"It was never about [former minister of local government, Nanaia] Mahuta, it was never about co-governance, it was about affordability and debt, and now we’re starting to see it.
"We made the best decisions given the circumstances and realities at the time; the election changed everything."
Several councillors expressed their concern at the anticipated rates rises.
Final projections remained to be calculated following yesterday’s decisions, but councillors agreed to set a 25% rates cap for the next three years, having retained a 4% cap since 2017.
Cr Gaynor Finch said she was "horrified" by the expected increases.
"I’m horrified about this situation and how much the rates are going to go up, but I don’t think we have much of an option. It’s important we give people lots of notice and explain in simple English the reasons why."
Cr John Herbert said he was in disbelief.
"I don’t think any of us believed a year ago we’d be sitting here agreeing to a 25% rates cap. It makes me shudder."
There was general agreement the council should front-foot the changes in revised LTP documentation due to go out for consultation shortly.
Cr Jock Martin said there was no point in "sugar coating" the situation.
Cr Ken Payne agreed.
"This will be the most significant rate rise we’ll have had in our history. It would be very remiss of us not to include it for the consideration of ratepayers during consultation."
The enforced changes to draft LTP materials will delay consultation by three weeks.
Residents will get to have their say on the revised proposals in late March.
