By RNZ

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

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

The council said it took an “essentials only” approach to cut costs, including delaying non-critical work 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.

“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 per cent increase.

In Cromwell, a residence with a capital value of $680,000 might face a 27 per cent hike, raising rates from $3229 to $4108.

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 of $5.28m were in line for an 8 per cent 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 per cent average increase to its community for consultation.

About 65 per cent of the Central Otago District Council’s revenue comes from rates.

The total rates required had increased by $9.89m or 22.6 per cent, 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 per cent hike while the Alexandra Hotel was in line for a 38 per cent rise.

District Mayor Tim Cadogan.

The council said inflation has ballooned its cost by 25 per cent 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.

- RNZ

This article was originally posted on the NZ Herald here.