Central Otago home owners facing rates rise up to 33%

4:03 pm on 24 April 2024
Central Otago District Council.

Photo: Supplied / Google Maps

Central Otago ratepayers are facing large and varying rates hikes with some homes in line for increases of up to 33 percent.

The Central Otago District Council signed off its draft annual plan for consultation on Wednesday, saying its starting point was a 45.4 percent rates increase.

The council said it took an essentials only approach to cut costs including delaying non-critical work to reach an average rise of about 21 percent, while grappling with rising costs across the board.

District mayor Tim Cadogan said it was a tough but necessary decision.

"We've made, I believe, the responsible decision not to put things off for tomorrow. Not to cut depreciation and therefore make tomorrow pay for today's usage and things like that," he said.

Central Otago mayor Tim Cadogan

District mayor Tim Cadogan. Photo: Supplied

"It's a very hard pill to swallow but I'm, at this stage, satisfied that there's not really much meat left on the bone to pare off."

The consultation document gave ratepayers a taste of what to expect with examples in suggesting a Roxburgh residence with a capital value of $425,000 could be in line for a 33 percent increase.

In Cromwell, a residence with a capital value of $680,000 might face a 27 percent hike, raising rates from $3,229.69 to $4,108.68.

At the lower end of the scale, an Alexandra lifestyle block with a capital value of $1.3 million and a Manuherekia farm with a capital value $5.28m were in line for an eight percent increase.

The council joins a growing list of local government bodies that are staring down double-digit rates rises, including the Gore District Council, which voted to take a proposed 21.4 percent average increase to its community for consultation on Tuesday.

About 65 percent of the Central Otago District Council's revenue comes from rates.

The total rates required had increase by $9.89m or 22.6 percent, the council said.

Deputy mayor Neil Gillespie said it was a bitter pill to swallow.

"I would love to be able to say that I'd found the silver bullet to this but I can't. I think it's a matter of keep doing the hard work we're doing to get to where we are, and we will, through the Long-Term Plan next year ... look at those bigger picture issues," he said.

Commercial businesses were not escaping the rising rates either with the draft budget's sample rates suggesting the Omakau Hotel was facing a 42 percent hike while the Alexandra Hotel was in line for a 38 percent rise.

The council said inflation has ballooned its cost by 25 percent this year compared to what was budgeted for, with interest, insurance and energy costs spiking enormously along with infrastructure costs.

Three Waters costs accounted for more than a quarter or $18.6m of the council's operating costs in the upcoming financial year, which the council said was $5.6m more than it was budgeting for.

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