The Waitaki Mayor, Mel Tavendale, concedes it will be a "tough ask" for local residents to absorb a mammoth 22% rates hike.
By Adam Burns of RNZ
Local councillors "reluctantly" agreed to the rates increase for the next financial year during an extraordinary Waitaki District Council meeting on Tuesday.
The council had been seeking feedback on three possible rates rises of 19%, 27% or a whopping 45% as it tried to plug a projected $14 million operating deficit.
A bleak financial forecast prompted calls from stunned ratepayers for a government probe of the council's finances, due to fears people would lose their homes. More than 500 submissions were received.
Speaking to RNZ, Tavendale said a 22% increase was not acceptable.
"We haven't been rating enough for a number of years to cover our actual operating costs. We've had deficits that we've accepted for the last nine out of 10 years as a council, and essentially, things are costing more than we have been bringing in rates."
An expensive water services programme had contributed to a huge increase in expenditure for local authorities.
Tavendale said it would be a struggle for residents.
"It's going to be a real tough ask. Essentially, our median income is 32,000 as a community, which is 10,000 less than the national average."
Concerns were raised during the meeting by Councillor Mata'aga Hana Fanene-Taiti about the ability of residents absorbing costly rates bills.
"There are parts of the community that realistically won't be able to [pay]. Have we considered what that gap could potentially be?" she said.
In response, council support services director Paul Hope said the costs would ultimately be recouped because council "could sell properties".
Tavendale said the council could legally force the sale or lease of a property to recover unpaid rates but it was not standard practice.
"It's certainly not the direction we head down at all. We do whatever we can to not resort to anything like that," she said.
The council was exploring payment plan options for ratepayers, Tavendale said.
Councillor Jim Hopkins, who voted against the rates increase, said people were considering leaving the district altogether.
"Sorry, it's a monstrously huge amount," he said.
He said he had never seen more anger and concern over an issue than what he saw among the hundreds that attended a public meeting in Oamaru earlier this month.
Alongside the rates increase, other changes to the capital expenditure budget were also decided, including a $5.3m reduction in the water programme, a $1.2m increase in roading investment, and $383,000 in reductions across other budgets.
This would lower council's debt position, but not its operating deficit.
Further cuts to operating budgets for training, travel and catering totalling almost $100,000 were also agreed to.
Ratepayers and residents group want council to look at internal expenditure
The Waitaki Ratepayers and Residents Association wants the council to get out the "red pencil" and start cutting costs.
Association chairperson Ray Henderson told Morning Report residents were disappointed that the council hadn't looked at how to reduce its own spending and believed ratepayers were being imposed on unfairly.
"Ratepayers have to re-budget and work out where they can cut their spending. The council at this stage hasn't come up with any dramatic cuts in their spending.
"All they've said is, 'we've got these projects, we've got this and that that we must do'. They might defer a couple of projects but they haven't come up with a culture of, 'let's cut our internal expenditure'.
"That hasn't come out at all from this consultation."
He said ratepayers were owed an apology from the council.
"'This is the situation we've created and we're very sorry about it,' that hasn't come out. All they've said is ... 'this is what's happening'."
Henderson said the council should also work on increasing its revenue by attracting more businesses to the area.
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