Council mowing down potential 20%-plus rate rise

“I can’t be adding 20% to [rates] so we’ve got some cutting to do.”

The Invercargill City Council is in cost-cutting mode as it grapples with inflation and works to ensure ratepayers aren’t lumped with a 20%-plus rate rise.

Invercargill Mayor Nobby Clark said he was advised by council staff soon after winning the election in October that a 20-plus percent rate rise was in the pipeline given the various cost increases.

Like households, the council has been hit hard by the rise in various costs.

“We run a whole lot of vehicles and fuel costs have doubled in the past two years, just on that issue alone we have got extra costs,” Clark said.

He said when the council put together its long-term plan it did not expect inflation to be at the level it was now.

Clark added they were determined not to pass all of that increased cost onto ratepayers and he was confident the council would get it down from 20 percent to between a 4 to 5 percent rate rise.

Invercargill mayor Nobby Clark says they are trying to find $8m in savings to keep rate rises to between 4 and 5%.

Infometrics provided advice to the council that the living cost, for the average Invercargill family, over the past 12 months, had gone up by $150 per week.

“That’s got to come from somewhere because wages haven’t gone up. So, there’s some tension there,” Clark said.

“I can’t be adding 20% to [rates] so we’ve got some cutting to do.”

It has equated to the council needing to find $8 million in savings to bring it down to that 4-5% rate rise mark.

“A lot of councils haven’t been able to do that, they are struggling. It’s right across the board.”

“We’ve cut back some services, we’ve looked at where we can make savings. It involves staff making some tough decisions around service delivery, but we will get there.”

Clark used its lawn mowing as an example of where services have already been cut.

“We mowed the lawns out at Sandy Point every week, we’ll now do it every fortnight. In some cases, we were doing it once a fortnight and we’ll now do that once a month.

“So that cuts the input you need there.”

Clark said $40m would also be cut from capital expenditure to keep the servicing of its debt lower than projected.

Another option to lower the impact on ratepayers could be selling off assets, Clark said.

The council owns land and buildings that might not be regarded as key council business and could potentially be off-loaded. Its commercial development in Don St could be one option.