Christchurch City Council to focus on keeping rates rises under 5%

Christchurch City Council wants to keep rate rises below 5 per cent in next 10 years.
JOSEPH JOHNSON/STUFF

Christchurch City Council wants to keep rate rises below 5 per cent in next 10 years.

Christchurch City Council says it will focus on keeping rate rises below 5 per cent during the next 10 years – even if it means reducing services. 

The declaration was made in a mayor's report outlining councillor expectations for the 2018-2028 long term plan (LTP) – a critical document setting out the council's spending priorities for the next 10 years. 

The report said the council would need to balance post-earthquake investment in the city with the need to reduce costs for ratepayers. 

"The right thing for ratepayers must be a reduction in the percentage rates increase," it said.

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Rates rose 5.5 per cent this financial year and had increased above the rate of inflation each year since the 2010 and 2011 earthquakes. 

The report said rates increases of this magnitude were not sustainable and all avenues must be explored to keep rate increases at a minimum.

The council wanted rises to track downwards to under 5 per cent and settle to a rate in proportion with the inflationary pressures faced by the council.

However, exactly what the council's inflationary rate was, was not known, but staff would provide information in the draft LTP on what measure it would use to determine the council's inflationary rate.

The average rise in local government costs was about 3 per cent annually, Local Government New Zealand president Dave Cull said last month.

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In order to keep rate increases down, councillors had acknowledged there would have to be a reduction in operating and capital expenditure.

Councillors have asked staff to provide them with options for managing a reduction in operating expenditure, including service reductions if that was required.

The report said operating expenditure reductions should focus on the water and transport areas, plus parks and recreation and sport functions.

When asked if reducing operating expenditure would lead to job losses, Mayor Lianne Dalziel said that would be "drawing a long bow".

The council had already been through significant restructuring in the past few years, saving millions of dollars and leading the loss of 46 jobs in 2015.

The report said councillors appreciated the LTP would be financially challenging given the volume of capital work the council had still to do and the savings the organisation had already made in operating expenditure.

"There will be demand for more projects and funding than the council can afford."

The council still faced the unknown cost of completely repairing its earthquake-damaged horizontal infrastructure and the consequences of managing major storm events and coastal issues including rising sea levels.

Recovery costs for the Port Hills fires would also be significant, the report said.

Dalziel said there was now a need for a cost-sharing agreement with the Government on land drainage and it was top of her list to bring up with the Government post-election.

"It's not sexy to talk about land drainage, but it's fundamental to getting the city right."

Planning for the council's LTP has started and a draft would be released for consultation early next year, before being approved by the council in June.

 - Stuff

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