Invercargill city councillors yesterday agreed to increase rates by 2% for the next year starting July.
A report from group manager of finance and corporate services Dave Foster said modelling showed a 2% rates rise was a ‘‘practical compromise’’.
He told the council the impact of Covid-19 on the economy meant it would reduce the rates rise.
The council was told year 3 of the long-term plan forecast a 3.5% rates rise with the following two years being about 5%.
A zero rates rise was not considered sustainable; compared with a 2% rise it would mean ‘‘the debt level of council in 10 years’ time will be $12.5million higher, pushing the city very close to its debt limits’’.
It would cost $16million of capital work in the 10-year programme.
The average rate was $2150, which would increase by about $40 a year with a 2% increase.
Councillor Nobby Clark said a modest rates increase was the way forward.
The council met via Zoom.
