Rates tipped to rise by 6.5%

Last updated 05:00 25/02/2014
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The cash-strapped Christchurch City Council has managed to shave nearly $10 million off its budget but ratepayers still face an average rate rise of 6.5 per cent.

For the average homeowner that means their rates bill will go up in July from $36.38 a week to $38.74.

"With all the uncertainty around our financial position and time constraints it's been difficult to really make major changes to the . . . budget but I'm happy with where we have ended up," said council finance committee chairman Cr Raf Manji.

By making small reductions across the board the council had managed to make $9.9m of savings but it was still looking for more.

This afternoon councillors will begin debating the draft Annual Plan, which maps out the council's spending plans and work programme for the 12 months beginning July 1.

It provides for a total rate take of $346.9m, which is $9.9m less than forecast in the Three Year Plan (TYP) the council produced last year. However, rates will still need to rise by the forecast level of 6.5 per cent because of a drop in the city's rating base.

The city's rating base has dropped because earthquake-related demolitions are exceeding rebuilds by a larger amount than was assumed in the TYP.

In the TYP it was assumed the rating base would grow by 0.9 per cent but it has actually decreased by 2.2 per cent.

Council acting corporate services general manager Diane Brandish said the growth projection was one of several forecasting assumptions that had required updating.

Staff had also revised the interest rates on which the budget was based to better reflect current and expected interest rates. This meant the rates for new borrowing in the draft Annual Plan were 1 per cent higher than they were in the TYP.

Other significant changes from the TYP include:

Increased dividend and interest revenue of $2.3m, including a $1.3m increase in dividends from Christchurch City Holdings Ltd and Transwaste. $11.9m of increased expenditure relating to building consenting and inspections - an increase the council is looking to offset by an increase of $10.2m in fee revenue. $1.1m of additional costs for the Christchurch Transport Operations Centre and $2.5m of additional funding for projects such as Sensing City.

The draft Annual Plan also proposes small increases to many of the fees the council charges for its facilities and services - in most cases the increase is about 3 per cent - and some small cuts to service levels.

When asked when the council expected to receive the final report on the state of its finances from advisory firm KordaMentha, Manji said he expected a draft by the end of the week and hoped to release it publicly next week.

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"There has been a hold-up with the latest estimates for the infrastructure costs. It may have some impact on the capital programme but our main focus now will be the Long Term Plan (LTP). That's where we will look much more seriously and deeply at our long-term strategy," Manji said.

- The Press


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