9.8 per cent rates rise proposed for Dunedin

Dunedin City Council spending had to be reprioritised as several key projects lacked the funding they needed. Photo / ODT

A nearly 10 per cent rates rise has been proposed in the first year of a Dunedin long-term plan that includes $1.5 billion in capital spending over its 10-year span.

The Dunedin City Council yesterday released draft budgets for its 2021-31 plan for consultation purposes.

The budgets included an overall rates increase of 9.8 per cent next year, and an average yearly rates rise of 5.68 per cent a year for the following nine years.

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The capital budget of $1.5 billion over the next decade would mean council debt would reach $869 million by 2031, a report from the council's executive leadership team and finance department said.

Dunedin Mayor Aaron Hawkins said the proposed rates rise was as high an increase as there had been for many years.

However, Hawkins said it was a rates increase on some of the lowest rates of any city in the country.

Dunedin was a growing city and its transport network and housing capacity in particular needed to keep up.

The capital programme, while ambitious, was largely overdue spending on renewals, or fixing ageing infrastructure, he said.

The draft budgets to be debated next week had been prepared by council staff, to deliver on what councillors told them they wanted to do.

But there would also be further requests from the community through submissions and public hearings, Hawkins said.

There would be a full public process before final decisions were made in May, he said.

"There's a lot of work to do over the next 10 years, and none of it comes for free," he said.

"Those of us living here now have a duty to those who come after us."

The report to the council said maintaining council services and assets as the city grew was an issue.

While the proposed rates rise of 9.8 per cent delivered a balanced budget next year, staff still needed to find $4million in savings.

Further, council spending had to be reprioritised as several key projects lacked the funding they needed.

The draft budgets maintained current levels of service in all areas in the first year of the 10-year plan, the report said.

But spending would increase once the outcome of the kerbside collection consultation was known and when the South Dunedin Community Hub and Mosgiel Pool were completed.

Notably, a full amendment to the 10-year plan could be required before 2024 because of likely nationwide reforms, including the 3 Waters programmes and the Resource Management Act 1991.

There was uncertainty about how these reforms would affect individual councils, but the draft budgets were written on a status quo basis, it said.