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City councillors have been shocked by revelations insurance money they thought was available for a new aquatic facility for the east has already been spent.
Christchurch Mayor Lianne Dalziel told councillors yesterday that she did not know where the $30th million promised for the New Brighton aquatic centre would come from.
The community had been told the money would come from the insurance proceeds for Queen Elizabeth II Park, but that money had been fully allocated to the new metro sports facility in the city centre.
Burwood-Pegasus councillor David East said he was shocked, as he understood the QEII insurance payout had been tagged for the New Brighton project.
‘‘If that is not the case the expectations of our community have been lifted somewhat highly,’’ East warned.
‘‘My concern is over the quality of the information we are receiving on these matters.’’
Dalziel said tough calls needed to be made on what community facilities are rebuilt – and when – because the city council’s insurance payout is going to be less than expected.
She is worried community expectations have been raised too high.
‘‘We’re going to have to think seriously about some of the commitments the previous council made,’’ Dalziel told councillors yesterday.
She said they were going to have to make some tough decisions about what their priorities were because they simply did not have enough funds to do everything.
Dalziel said the security of the insurance payouts the council could expect to receive had been overstated.
‘‘There is no question that both central government and the people of Christchurch had not been accurately informed about the serious risk we face in terms of that insurance settlement.’’
Council finance committee chairman Cr Raf Manji said the council was making progress with its insurers, Civic Insurance, on its outstanding claims and it was likely a final settlement of some sort would be reached.
It would be for less than the council was banking on.
In the Three Year Plan (TYP) adopted by the previous council last year it was assumed insurance claims would fund about $1thbillion of the council’s rebuild costs. So far it has been paid less than half.
‘‘We’re not going to have as much money as we thought we would have. People need to realise that not everything is going to be funded and that is the reality,’’ Manji said yesterday.
Dalziel said the council was going to have to relook at the commitments it had made and work out what its priorities were.
‘‘I think there was a lack of realism in the last term that we are paying a huge price for,’’ she told councillors.
The council’s tight financial situation did not mean that some facilities would never be built, but it might mean they could be delayed for several years. ‘‘I would encourage you to think very carefully about what your community is saying about their priorities,’’ Dalziel urged councillors.
Her comments come as the council prepares to receive the final report from KordaMentha, the financial advisory firm it engaged to conduct a full audit of its finances.
In an interim report released just before Christmas, KordadhMentha identified insurance as a big risk for the city. In that brief, two-page report it described the council’s insurance position as ‘‘very complicated’’.
It said there were some aspects the council and its insurers did not agree on. There were also disagreements between the council’s insurer, Civic Assurance, and Civic’s own insurers.
It concluded the amount the council would get from insurance remained a ‘‘big risk’’, particularly as the council had to pay for some of the costs of building the anchor projects whether or not it got as much as it expected from insurance.
- © Fairfax NZ News
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