KEY POINTS:
Higher costs of borrowing, services and construction will squeeze budgets set by Auckland's northern and western city councils in an attempt to limit rates rises this year.
Waitakere is seeking public approval for a 8.41 per cent rise on the average home and North Shore is proposing to lift rates on average by 5.9 per cent.
Both cities have put off spending on some big ticket items in 2008-09 but they face higher maintenance and depreciation costs from completed projects.
These are feeding rates rises for 2008-09, with increasing costs for staff, construction and resealing roads.
Inflation is hitting both cities' coffers.
The cost of the North Shore's single most expensive project - a treatment plant outfall tunnel reaching 2.8km into the Rangitoto Channel - has increased from $103 million to $116 million.
Ratepayers are asked to provide $196.1 million in 2008-09, which is $60 million more than the rates income in 2005-06.
The average rate is for a house with a land value of $312,000, which presently pays $1711 and will go to $1813. A house of $600,000 land value will pay $2401 or 6.4 per cent more.
Mayor Andrew Williams said the council worked to contain the rates increase which was 2.5 per cent lower than the former council's estimate.
The trimmed version is based on a proposed change to a Treasury management policy which would let the council repay loans over 50 years instead of 30 years. In the coming year, debt is expected to reach $390 million.
In Waitakere, the council says it needs 8.41 per cent more in rates.
Some homes will pay more or less than that according to land value.
A recent revaluation for rating boosted values of modest homes by as much as 48 per cent. As a result, the city's average home has gone from $150,000 to $279,000, and will pay rates of $1823 - about $3 a week more.
A house with a land value of $200,000 will pay $1634 and one with a $600,000 land value attracts $2493.
Annual plan chairwoman Janet Clews said much of the rates rise was outside the council's control. Inflation and rising construction costs, including those for concrete and steel, added about 5 per cent to the budget.
Oil price rises were felt in the cost of bitumen for resealing roads.
"We have also faced $1 million cost increases in depreciation and interest on loans is up by $6.6 million," said Mrs Clews.
"In our budget, we are providing for a balance of everyday services, medium to long-term planning and implementation," she said.
The council is also seeking views on raising the price of rubbish bags for household collection by 15 cents on the maximum retail price of $1.65.
It says the move will encourage households to cut down on the amount of waste they send to landfills and instead pay more attention to what items should go in the recycle wheelie bin.
The cost of tap water to ratepayers also rises for the first time in eight years from $1.48 to $1.53 a cubic metre. Meeting the new drinking water standard has added $1 million to council costs.
