The reality of a 49% average increase in the general rate has hit people this week as they've received their rates demands. Many people have called and emailed me about it, including Peter Newport of Crux. His story is here: https://crux.org.nz/community/bill-shock-orcs-762-million-in-assets-49-rates-rise/.
A couple of questions have arisen though. First, why are the rates going up so much. The main reason is the need to staff up to deliver new government requirements around environmental responsibilities. Water policy changes as central government responded to community expectations of the quality of our waterways has added a 35% general rate increase before we even look at any other projects. So this is the big impact on your rates bill. In my view this is playing catch up on years of ignoring the health of our waterways and years of ridiculously low rates bills that were a product of not doing the required work. You can find out more about this, and where the other rises have happened by checking out the Long Term Plan consultation document.
You'll have noticed too some new targeted rates on your bills. A biosecurity rate of about $30 depending on where you live. This is towards pest control. Currently the management of pests has been left to landowners with ORC holding only a regulatory role. This has been a disaster and we now have a rabbit explosion and other biosecurity issues. The Council will now take a greater role in coordinating landowners to drive pest numbers down. Then there's around $15 for river and waterway management - this is mostly to remediate Lake Hayes which few people would argue needs doing. ORC has ignored this Lake for years. We are now going to do the work but of course it has to be paid for. Then yes, there's the bus funding - that's about $52 for most people who can benefit from the bus routes. Maybe get out and use them, it should be cheaper than taking a car and paying for parking and is our major tool in driving down the carbon emissions attributable to our private car transport system.
Those suffering insomnia may get relief form checking out the Long Term Plan full document which also outlines the financial strategic approach. This from page 77.
'There are key issues associated with the Long-term Plan 2021-31 that have significant financial impacts. They include: - The tension between land use intensification, both rural and urban, and national direction to maintain and improve our freshwater resource - The need for a collaborative and inclusive approach for achieving acceptable environmental, economic and social outcomes in particular for land and water issues - Planning for and responding to the risk associated with providing flood protection and drainage schemes - Ensuring our operational response to maintaining and improving Otago’s natural environment is appropriate - Meeting the need for effective public passenger transport services in Dunedin and the Wakatipu Basin.'
People ask why we don't use our significant balance sheet to finance some of this work. The reason is that it is not prudent to fund operations out of capital. Council's investments produce income that is already used to offset rates - Dividends from the Port will fund $13 million this year, rising to $20m by year 10 of the plan. Those assets have been built by previous ratepayers and need to be preserved to benefit the next generations as they benefit us now. They afford us a financial resilience that we need to think very hard about using. In my mind it would be very poor governance to fritter these assets on the work this generation needs to fund.