WAITOMO'S rates are likely to rise.
THE Waitomo District Council governance team is settling in well, with the four new members coming to grips quickly with the ways of local government. Our governance structure is simple, with just two wards – urban and rural – and three members representing each ward. Unlike our neighbours, we do not have community boards nor Māori seats, though the latter will come up for consideration in 2023. While our simple organisational structure keeps administration costs down and decision-making processes straightforward, our difficult Waitomo topography puts an upward pressure on the costs of road upkeep. Waitomo has an extensive roading network, through steep country, much on the move, aggravated by the weather conditions we have been experiencing this year. Last week’s weather brought more troubles to our roading network. Once again our civil defence team was put on alert as flooding and slips occurred. Some of the slumps and dropouts on our roads are serious. The council’s engineers and contractors are on the job, and Waka Kotahi is engaged. We rely on the latter to come to the party with the fix to these. We need their engineering design sign off and their funding contribution approval. If damage to our roads puts pressure on costs, so too are interest rate hikes on council’s debt putting pressure on council finances. We are paying the price for the Reserve Bank’s increases in the official cash rate required to bring inflation under control. Our debt reduction programme of the past three years is helping offset this cost, with debt now some 15% below 2018 levels. This month elected members will begin to look at forecasts for the next financial year. With annual inflation now running more than 7%, the budget setting process will be tough. Many of the council’s costs, like fuel and asphalt, have risen faster than consumer price increases. Rates and government subsidies are our only sources of income to cover such costs. To moderate rate increases, we will need to review again discretionary expenditure. We also have some unspent funds that we can use from work held up due to Covid impacts on council operations. All councils are in the same boat. The next three years will be challenging for elected members as cost increases put pressure on rates, while those who fund the rates are feeling the pinch from the same evil – inflation.
