ICC depreciation expenses not fully rate funded

The Invercargill City Council’s confirmed 5.67%​ rates increase was in part achieved by a $6.95 million budget deficit.

This was substantially down from a $15.5​ million figure indicated in earlier draft estimates.

There had been changes to the council’s financials since the larger estimate was reported, its acting group manager for finance and assurance, Patricia Christie, said.

“While we are forecasting a deficit of $6.95 million, this is after a depreciation expense of $41.66 million,’’ she said.

The council has faced extra depreciation expenses after Audit NZ had found assets had been significantly undervalued.

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“We will have sufficient cash to pay for our services, but we have chosen for 2023-24 not to fully rate fund all of our depreciation cost,” Christie said.

As the council worked through its long term plan process, it would plan to move to a balanced budget position in coming years.

The nearby Gore District Council’s 10.97% rates increase was an averaged figure which that council acknowledged would feature significant variations for individual households.

This followed a district-ride revaluation in which properties of lower capital value had experienced higher increases than other residential properties.

However, in Invercargill, the 5.67% increase “is what the vast majority of our ratepayers will receive’’, Christie said.

Those with new builds, or changes in property valuation notified during the year, would see a different change in their rates, she said.