$12m costs blowout: 10 per cent rates rise tabled for Thames Coromandel property owners

Thames Coromandel mayor Sandra Goudie wants to hear from the community about the council's proposed 10 per cent rates increase. Photo / File

Thames Coromandel wants to hit ratepayers with a 10 per cent rates increase from July and hike up fees and charges.

And even then the council says the proposed 9.98 per cent increase is not enough to cover the its burgeoning operating costs which caused it to blow its budget by more than $12 million in two years.

It would also have to borrow money in the form of a short-term loan that would be paid back from future rates increases and a reprioritisation of council's spending. The rising costs have caused council to overspend by $6.7m in 2018/19 and it is forecast to blow out again by $6.7m in 2019/20.

Thames Coromandel mayor Sandra Goudie said the cost of maintaining council's current services had escalated at a much faster rate than that estimated two years ago.

Goudie blames increased costs around rubbish and recycling and core infrastructure costs, higher contractor rates in the civil construction industry due to increased competition and a council commitment to increase the delivery of the capital works programme.

The increase is significantly higher than the 3.7 per cent increase signalled in the council's long-term plan, and is an average $287 increase per property.

On top of this, the council is also proposing to increase the price of user fees and charges in the areas where it has had to spend more.

Goudie said the council would be seeking public feedback on the proposal as part of its Annual Plan consultation from March 10 to April 14 and she urged the public to give feedback.

"We are concerned at the impact this rates increase may have on some ratepayers and we're committed to looking at options to reduce overall expenditure as we develop our next long-term plan over the next 12 months," Goudie said.

The exact impact of a rates increase on any property varies depending on the property type and location, and ratepayers will be given a clearer idea of how each option could impact their property's rates when the consultation document is released next month.

The council is also seeking feedback on what services the community values and what could be scrapped or reduced as it attempts to find savings.