Mayor: Council needs to be better prepared
Christchurch Mayor Lianne Dalziel has slammed the city council's lack of financial resilience, saying it needs to be better prepared to cope with unexpected costs.
Councillors today met to try and work out how they could lessen the impact of a $4 million operating deficit on the city's ratepayers.
''We have to set aside sufficient resources to weather any storm,'' Dalziel said.
The operating deficit is largely due to unexpected costs associated with this year's severe flooding, and the government-led overhaul of the council's dysfunctional building control unit after it lost its accreditation to issue consents.
The council has spent about $10 million on the latter and about $5 million on the post-flooding clean-up.
Dalziel said both events had stretched the council to the "nth degree'' financially, and highlighted the need for a bigger contingency built into its budget.
''We have got to be better prepared; we need to have more financial resilience,'' the mayor said.
When the council released its draft Annual Plan earlier in the year, it proposed a rate increase of 6.5 per cent. However the operating deficit may now push rates up to almost 8 per cent.
An increase of that magnitude would hike the average weekly rates bill in Christchurch from $36.38 to $39.27.
At a stop-start meeting earlier today, Dalziel said she had asked council staff to go over the budget one more time and see if they could find any additional savings to help reduce the rates rise.
She was expecting that work to be done overnight so the council could consider its options and finalise the plan tomorrow.
The mayor said if elected members had known the council was sailing so close to the wind financially, they would have included more spending cuts in the draft Annual Plan. However they could not make any significant cuts now without going out for further public consultation.
Legally the council must set the rates and approve its 2014/15 Annual Plan by Monday, so time is against them.
Cr Yani Johanson said many public submissions on the draft Annual Plan had called for the council to defer its spending on some big anchor projects planned for the central city. However it it appeared no consideration had been given to that, he said.
Council corporate services manager Diane Brandish said the timing of the anchor projects did not impact directly on rates, as they were to be intended to be funded through insurance payouts or borrowing.
Dalziel said there was no point discussing the timing of the anchor projects, nor how much money was being spent on them, as that was dictated by the council's cost-sharing agreement with the Crown.
''There are things that we can change and there are things that we can't change and that's one of the things that we can't change,'' she said.