Flooding pushes Christchurch rates to 8pc
An 8 per cent hike in rates is looming for Christchurch homeowners as the city council admits it will end this financial year with a significant operating deficit.
The council was originally proposing to increase rates by an average of 6.5 per cent from July 1, but a report prepared for next week's Annual Plan meeting says an overall rate increase of 7.96 per cent is now required.
That would push the average weekly rates bill in Christchurch up from $36.38 to $39.27.
Council finance committee chairman Cr Raf Manji said the higher-than-expected rate increase was almost entirely due to the extra costs the council had incurred as a result of the severe flooding that hit the city earlier this year.
The council had tried to reduce its spending elsewhere to help offset the extra costs but it happened so late in the financial year that it had little choice but to recoup the money through rates.
''I don't think people will be very happy about it but the floods were something that couldn't be avoided and that's the cost of dealing with them. It's just something we have to pay for,'' Manji said.
Under the terms of the Local Government Act, the council must set its operating revenue at a level sufficient to meet its operating expenses.
For the 2014/15 year that means the council must either borrow to fund the deficit, increase the general rate or use another another rating mechanism, such as a targeted rate.
In this instance the council is proposing to offset its operating deficit through a one-off increase in the general rate of 1.27 per cent.
That would bring this year's total rate increase to 7.96 per cent.
In other changes to the draft Annual Plan, Mayor Lianne Dalziel is recommending the council:
- Include an additional $1.69 million in its capital programme so that it can extend the Christchurch tram route.
- Re-phase the cycleway programme so that it can be completed within five years rather than the eight years outlined in the draft Annual Plan.
Councillors will begin their Annual Plan deliberations on Tuesday.