Proposed 11.56% Rates Increase for Gore District
The Gore District Council is looking at a proposed district-wide average rate increase of 11.56% as it tackles rising interest rates and a tight employment market.
The proposed increase is higher than projections in the 2021 – 2031 Long Term Plan due to significant social and economic pressures worldwide that have had repercussions in New Zealand.
General Manager Corporate Services Lornae Straith said the inflation rate was relatively steady and the cost of borrowing low when the Long Term Plan was adopted.
“Some of our interest rates were below 2.0%. Today we are looking at an average interest rate of 4.26%.”
The Council will need an extra $900,000 in rates funding in the coming financial year to service its loans at the higher interest rates, she said.
“Given $200,000 of operational expenditure equals 1% of rates, the impact is an additional 4.5% on rates.”
Personnel costs were the other main driver, adding 5% to the rates.
Miss Straith said the higher staff costs were indicative of the tight employment market and the need to ensure appropriate staff numbers to meet levels of services.
“We have several vacancies proving difficult to fill. Therefore, we must recognise and retain the staff we have.”
Overall, the Council is budgeting to collect an additional $2.29m in rates in the 2023/24 financial year.
To keep the rates increase down, the Council will consider increasing fees and charges for some services.
One area is waste disposal fees at the Gore Transfer Stations. The Government is increasing its waste disposal levy from $30 per tonne to $50 per tonne from 1 July this year. This increase means the Council will pay an estimated $2.48m next year to get rid of waste at the Southland landfill.
Using rates to cover this increase would add 1.32% to the 11.56% proposed rates increase.
To avoid this, the Council will consider increasing transfer station fees by 30%, which would place costs with the user and encourage waste minimisation, Miss Straith said.
Delaying the rollout of a new kerbside recycling service is another option to keep the proposed rates increase at 11.56%.
“Any delay will allow the Council to collaborate with its WasteNet partners to explore efficiencies across the region.”
Rolling out a three bin kerbside service at the start of 2024 would add just over 2% to the proposed rates increase, she said.
The Council will consider the draft Annual Plan at its meeting next Tuesday (30 May). The meeting will be livestreamed on its YouTube channel.