A 0% rate rise sounds attractive, until you consider what needs to be cut from the council budget, a Canterbury council boss has warned.
Introducing library book charges, hiking swimming pool fees and selling off community halls could be among the trade-offs to keep rate bills the same.
Candidates across the country promised a 0% rate rise, including some running for the Waimakariri District Council.
This was despite the fact Waimakariri had one of the lowest rate rises this year at 4.98%.
Council chief executive Jeff Millward said a 0% rate rise is possible, but it would come at a cost.
The council would need to find around $6 million in savings, based on the Long Term Plan.
During the election campaign, the candidates were unable to identify the $6m worth of savings, but Millward said there was a number of things the council could do to reduce the rate rise.
The council could hike fees and charges at swimming pools and at MainPower Stadium and start charging for library books.
It could reduce the hours when swimming pools and libraries are open, let the lawns grow in council reserves, reduce the maintenance on the roads, or sell halls and assets.
“We would have to do a combination of all of these things and we would need to consult with the public on all of these things,” Millward said.
“When councils try to reduce levels of service they tend to get a backlash from communities who don’t want to lose these services.”
Millward said councils typically came under pressure during periods of high inflation or during cost of living pressures.
Not only are councils an easy target for national politicians, lobby groups or candidates, but they can be hit by rising costs caused by inflation, including building materials, project costs – and depreciation, he said.
Councils were required to fund depreciation, which allowed them to set aside reserves to fund the replacement of buildings and assets.
Waimakariri has nearly $3 billion worth of assets.
During high inflation, the value of those assets could increase significantly, placing extra pressure on council budgets – and ultimately on rates, Millward said.
“Because councils have to fund depreciation they do tend to suffer in periods of high inflation.
“But staff live in the community and they are ratepayers, so they don’t want to pay any more rates than they need to, so they want to make the services as cheap as possible.”
LDR is local body journalism co-funded by RNZ and NZ On Air.
