Council fund plunges $175m
The cash-strapped Christchurch City Council has almost depleted a special $225 million fund established post-quake to pay for better facilities, roads and footpaths.
The fund now has just $50.7m - and possibly less - left.
That is partly because the council has been regularly dipping into it to help pay for the repair or rebuild of quake-damaged facilities that were under-insured.
For example, in November it committed up to $780,000 from the fund - officially known as the Infrastructure and Building Improvement Allowance - to the rebuild of the Scarborough paddling pool, for which it had inadequate insurance cover.
Tomorrow councillors will consider dipping into the fund twice more to help cover shortfalls in the costs of repairing and strengthening two heritage buildings - Mona Vale Homestead in Fendalton and the Gaiety Theatre in Akaroa.
About $2.8m of repair work is needed on Mona Vale to bring it up to 67 per cent of New Building Standard (NBS), but the council's insurers are only willing to pay $2.2m, leaving the council with a $600,000 shortfall.
The 134-year-old Gaiety Theatre needs $624,400 of work to bring it up to 67 per cent of NBS.
The council had the Gaiety insured for $628,000 but it expects to only receive about $125,000 from its insurers as they have indicated they will only support repairing the building back to its pre-earthquake condition.
Part of the work required on the building is due not to quake damage but to its age and the construction techniques used in building it. About $135,400 of overdue maintenance work also needs to be done and that had been factored into the costs.
Deputy Mayor Vicki Buck said yesterday she was likely to support using money from the fund for repairing Mona Vale and the Gaiety, but she was very concerned by the rate at which the fund was being dipped into.
It was a finite fund, yet money was being allocated to projects without any clear assessment of what the priorities were in the rebuild.
If that continued to happen it was likely that when an important project arose which required extra funding, no money would be left in the pot.
"There's a lack of a clear sense of priorities and therefore if there is money available, people take it - it's human nature. It is being dipped into for everything," Buck said.
Cr Yani Johanson, who chairs the council's community committee, acknowledged the fund had been called on a lot, but said that was partly because councillors had decided they were no longer willing to sit back and wait for insurance proceeds to come through before starting repair and rebuild work on important community facilities.
"It's important we have things happening rather than just waiting and waiting and waiting," said Johanson.
He was comfortable with the level of spending but agreed the council needed to review its priorities.
Council acting general manager corporate services Diane Brandish said the fund had a balance of $50.7m at the end of October last year. The balance at the end of December was due to be reported to the finance committee next Tuesday and would be publicly available in the next few days.