Dunedin’s proposed rates rise 17.5% - ‘upsetting’

Friday, 8 March 2024

Cr Jim O’Malley on Dunedin’s new kerbside collection, the most modern in the country.

Dunedin City Council’s draft budget proposed a rate rise of $17.5%
3 Waters would add 5.4% to rates, while the city’s new kerbside collection, 4.4%.
Council had trimmed staff from 903 FTE to 852 FTE – a reduction in 51 positions

Dunedin City Council wants residents to prepare themselves for a hefty hike in rates, with Mayor Jules Radich acknowledging “how upsetting this will be for ratepayers”.

The council’s draft budget is proposing a rate rise of 17.5% for 2024/25, which would not deliver a balanced budget for the city’s books, but lead to a net deficit of $25.655 million.

Thousands of wheelie bins ready to be delivered across Dunedin.

The proposed rate increase would be higher for residential, a 19.4% increase, compared with commercial (13.6%), and lifestyle (16.3%).

The rise in rates was partly driven by the mandate of 3 Waters, which would add 5.4% to rates, while the city’s new kerbside collection, which will see the end of black plastic rubbish bags, would add a further 4.4%.

The increase in 3 Waters includes increased regulation and compliance costs to meet water quality standards, such as for chemicals and laboratory testing.

The current economic climate of high inflation coupled with interest rates largely negated many of the savings found across the organisation, including a reduction in budgeted staffing numbers from 903 FTE to 852 FTE – a reduction in 51 positions.

All other controllable costs have been reviewed and reduced where possible, the agenda, set to be discussed by councillors on Tuesday, said.

The council has also forewarned an area of uncertainty, that involved the amount of co-funding received from NZTA Waka Kotahi for budgeted transport activities.

The council will also discuss the future of Dunedin Railways Limited (DRL), which operated the Taieri Gorge tourist excursion train.

Aerial photographs taken by a drone flying over South Dunedin.

Council was recommended to fund $2m annually for maintaining and operating the company to use the KiwiRail line and Taieri Gorge line to Hindon until 30 June 2025.

Further options for potential rail, cycling and walking would be assessed and discussed at a later date.

In preparation of the meeting, Radich issued a statement saying: “Councils throughout the country are faced with very difficult decisions at this time because not only do we have substantial inflation and interest rate rises, we have the mandate of 3 Waters to meet as well as essential improvements across the city”.

He added that presenting a large rate rise to the public was “distressing”.

He added that financial sustainability was the goal for the city “and it would be preferable for our city to be in a position to halt its ever-growing debt and forge a pathway to reduction”.

He added that Dunedin rates were below the nationwide average, and would remain so even with the proposed increase.