Christchurch City Council
RATES COULD BE LOWERED
The Christchurch City Council hopes to reduce the overall rate increase below 2 per cent by the time the annual plan is
finalised.
This was said by the chairman of the Strategy and Resources Committee, David Close, at a meeting today to approve the
draft annual plan. He said talkback hosts were already chiding the Council for "what they call the relentless upward
trend in rates. I have to point out that Christchurch rates, for both residential and commercial ratepayers, are 20-50
per cent lower than other major cities in New Zealand." That was despite Christchurch providing a greater range of
services with fewer user charges, Cr. Close said. Increases on the existing low rates were modest in cash terms, he
said. "A $120,000 residential property will pay an extra 27c a week; a property worth $160,000, slightly above the
median, will pay an extra 35c a week. Even a $1 million commercial property will face an increase of less than $5 a
week. I hope we shall be able to reduce the overall rate increase below 2 per cent by the time we finalise the plan on
July 6," he said. He said he hoped the overall rate increase of 2.38 per cent in the draft plan would be reduced in the
submission round to below 2 per cent. Last year the Council projected that the increase would be 2.74 per cent. The
proposed increase translated into an increase of 2.25 per cent for residential ratepayers, a reduction of 1.41 per cent
for rural ratepayers, and an increase of 3.04 per cent for commercial ratepayers, Cr. Close said. Many commercial
ratepayers had a decrease last year. Cr. Close said the draft plan did not take into consideration the sale of the gas
networks by Orion. "A large proportion of the sale proceeds will be needed to repay the debt Orion incurred in
purchasing Enerco and a large proportion will have to be invested to maintain the income stream, which the Council,
through Orion, has received from the gas network," he said. Eventually, the Council would receive significant additional
income either by capital repayments or greatly increased dividends, which would enable a prudent Council to reduce rates
in real terms, he said. Cr. Close said one of the enjoyable features of the plan was that it catered for numerous
requests from the public. He cited $250,000 for an environment centre, another $35,000 for autumn leaf collection, and
$200,000 a year for the retention of heritage buildings. "The most significant increase in expenditure is the allocation
of an additional $50,000 a year to each of our six community boards. This represents a new step in delegation of
responsibility to local decision makers, who are better able to assess local needs," Cr. Close said. Funding of
long-term asset management plans was retained and another $4 million had been allocated to roading projects over the
next five years. The major upgrade of the sewage treatment system had seen $14 million included in the plan's capital
works programme for use in future years. "This brings to about $62 million the provision for the upgrade over about six
years," Cr. Close said. "This item... dwarfs all other capital projects and will also entail an increase in operating
costs. It is quite unrealistic to expect a project of this magnitude to be accomplished without impact on rates. It is,
in fact, one of the reasons for the blip of $4.78 per cent in the projected rate increase in year four of the plan," he
said. Submissions on the draft plan will close on May 29 and a working party will consider them in June. A final report
will be given at the July 6 meeting of the Council.