Invercargill's rates could rise by more than the planned 5.05% this year, according to the Invercargill City Council (ICC).

An ICC 2023/24 draft annual plan update, which outlines what Council plans to spend on projects, including the new museum, and day-to-day services, now forecasts a probable rates rise of 5.5%.

ICC Mayor Nobby Clark said the council was aware the community was being greatly affected by rising costs of living and council was focused on keeping a rates increase to a minimum.

“As a community we’re going to face some difficult decisions to bring the budget back into balance next year in the Long-term plan.”

The rates rise would mean an average increase of $145, or $2.78 per week, for Invercargill residential ratepayers, Clark said.

Council acting Group Manager Finance and Assurance Patricia Christie said savings of almost a million dollars have been found, however these had to be offset against increases in delivery costs linked to inflation, interest rates and depreciation.

Depreciation refers to the funds Council needs to put aside each year to pay to replace infrastructure as it ages,” she said.

“Depreciation is one of the biggest challenges we have faced this year. The value of all our infrastructure has risen which has significantly increased depreciation costs.”

Figures are subject to change over the next three months as new information becomes available ahead of the final plan being presented to Council for adoption in June, Christie said.

“We know that many in our community are finding it hard, and there are ways that Council can help,” she said.

The Government’s rates rebate scheme is available to low income-earners. Council also has rates remission and postponement policies and is in contact with other support agencies, she said.

“If you have trouble paying your rates please get in touch with us early,” Christie said.

Council Manager Strategy & Policy, Rhiannon Suter said that there was no public consultation around the Draft Annual Plan, but people can still let Council know their feedback online at letstalk.icc.govt.nz

The 2023/2024 Draft Annual Plan Update was to be presented to Council next week.