Mayoral Musings 20 March – Kāpiti Mayor Janet Holborow

25 Mar 2024, 10:03 AM

First published in the Kāpiti News on Wednesday 20 March 2024

A subject of much conversation, rates increases are an issue that communities around the country are grappling with. Often considered to be due to council’s focusing on ‘nice to haves’, a new report from Local Government New Zealand highlights a real pressure is the increase in costs for critical infrastructure works.

Analysing increases in local government costs (prepared by Brad Olsen of Infometrics) lays out the hard reality that between 2021 and 2023 inflation and cost increases dramatically raised the cost of construction. For instance, it costs approximately 30% more to build a sewerage system than it did at the start of the decade and bridges are 38% more. While inflation and additional costs are factored into projects, these far surpass the estimated increase. 

Operating costs too have seen an increase causing further challenges. Labour cost inflation is more than double the pre-pandemic average, and interest payments up 64% on pre-pandemic levels.

For councils around the country that have already planned and scheduled work, often with tight budgets, these increases mean hard conversations and decisions.

Unfortunately, Kāpiti is one of those areas impacted, with projected rates increases of 17%, or 12% if we rely more heavily on debt.  We’re acutely aware of the challenges households and businesses are currently facing, so we've been taking extra time to scrutinise our spending and strike a balance between paying off debt and keeping rates rises as low as possible in future years.

Council has critical work programmes underway that will shape our district in the coming decades. From water and sewerage pipe renewals to erosion control and roads, these are essential for our Kāpiti to thrive but come with increasing costs. As we head towards our Long-Term Plan KCDC is releasing its consultation document on 28 March , with more information in the council meeting agenda available on the council website on Friday.

Finally, it was sad to hear the passing of Graham Priest, long-time presenter on Coast Access Radio. His contribution to informing the community on issues of the day, as well as creating a repository of information about local people, was enormous. He will be missed.