18 Jul 2018

Kaikōura council backs away from 17 percent rates rise

From Checkpoint, 6:16 pm on 18 July 2018

Kaikōura District Council has slashed its proposed 17 percent rates increase by more than half, but it's going to have to use most of its rainy day fund to make up the funding shortfall.

The cash-strapped council has been trying to figure out how to fund its Three Year Plan, which includes costly infrastructure upgrades and earthquake repairs.

At its meeting on Wednesday, Kaikōura District Council voted for an average 7 percent rates rise across the board.

Rural ratepayers would have an average 5 percent rise.

Kaikōura farmer Justine Schroder said this would let farmers still struggling to recover from the 2016 earthquake get back on their feet.

"It just takes that extra pressure off and lets them get on with doing the important stuff."

Ms Schroder said the 17 percent rise initially proposed would have had serious consequences for farmers already under a lot of stress post-earthquake.

The lower rates may be a relief for farmers but come at a cost.

The council has $1 million from its share of a forestry reserve in Marlborough set aside for a rainy day, and has decided to use 60 percent to plug funding holes over the next two years.

It may have to use remaining $400,000 to help replant the forest in a couple of years' time.

Mayor Winston Gray said that would leave Kaikōura somewhat financially vulnerable if another disaster struck, but not entirely high and dry.

"We have other strings that we can utilise if we have another event," he said.

"We do have some landholdings and property we could utilise."

Budget-squeezing across other council departments and projects also contributed to the lower rates.

Mr Gray would not rule out other measures, such as a council restructure, to further trim spending.

"It's clear there are changes coming to local government, so we won't take anything off the table."

Councillor and Kaikōura Rural Support Trust representative Tony Blunt said he would not have signed off on the Three Year Plan if those cost saving measures had not been found.

"It was simply too severe for all of our ratepayers in my view.

"Our town has been severely impacted by the road closures and the earthquakes and our tourist numbers are still fairly low."

Kaikōura District Council has committed to a six-month review of its assets to ensure its finances are as future proof as possible.