Concern at trend of rising rates

NEIL RATLEY
Last updated 05:00 31/10/2012

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The increasing use of rates to cover council costs was criticised by councillors at a city council meeting yesterday.

Rate hikes were also discussed by councillors at an extraordinary meeting of Invercargill City Council yesterday.

The issue was discussed at a meeting to formally adopt the council's annual report.

Last year 55 per cent of council costs was covered by rates. This year the figure is 60 per cent.

Councillor Ian Pottinger said the increase was worrying. Rate revenue increased by $2 million between 2010-11 and 2011-12 but revenue from other sources fell by $6m.

City council finance and corporate services director Dean Johnston said there were several reasons for the decrease.

A slowdown in building consents, less funding from central government, including a reduction in cash from the NZ Transport Agency, and lower solid-waste charges because of recycling were all factors, he said.

Cr Pottinger said the 5 per cent increase added up to a lot of money which ultimately hit ratepayers' pockets.

This was something the council's audit and risk committee should consider looking at, he said.

He said 10 years ago rates were $960 and in 2012 they were $1768.

"If this continues ratepayers will be facing charges of $3400 in another 10 years' time."

Councillor Lindsay Abbott also raised concern about rising rates and falling revenue from other sources.

However, the annual report was adopted by council after independent auditors gave it the all clear.

Councillor Neil Boniface said it was "a very good report" with an anticipated deficit of $4m coming in at $1.5m.

The budget deficit was reduced because of increased rate penalties and fuel tax and a lower interest rate environment, he said.

However, operational costs were reduced to budget because a $2m grant to the proposed Stadium Southland rebuild did not eventuate, Mr Boniface said.

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