Services, rates, costs and savings
Since 1989 Christchurch City Council has generally had a policy of providing the same level of services throughout its area. A single funding policy is also applied so services are not only provided to a common standard citywide, but are paid for by a single system of user charges and property rates.
The position on Banks Peninsula is different. Services standards are generally lower than in Christchurch; they differ from one community to another and there are variations in the funding policy by which services are paid for.
It is recognised that many peninsula residents do not want urban standard services, such as kerbs and channels and footpaths. However, there are a number of areas in which it seems likely that a new, amalgamated City Council would consider that, in the interests of equity, services for peninsula residents would need to be improved.
In round terms, it is considered that the cost of inevitable service standard increases on the peninsula would be about $720,000 a year in terms of operational expenditure - plus $1.15 million a year of capital expenditure.
There would also be savings. There would be efficiencies in adding the administration of Banks Peninsula services to structures already established in Christchurch, enabling overhead costs to be reduced. These efficiencies are estimated about $560,000 a year.
Overall, the cost of amalgamation is about $1.3 million a year. In return for this, the standard of services provided on the peninsula (for residents and visitors) would be worth $1.8 million more.
The cost of services is only part of the picture when it comes to calculation of rates. All councils are required to prepare a funding policy which determines how their various services are to be paid for, including the balance between user charges and rates funding, and the extent to which different ratepayer groups (residential, commercial and rural) should be required to pay for services. There has been a tradition in Christchurch of paying for services uniformly across the City. Banks Peninsula has traditionally had a more complex pattern of paying for services on a more local basis.
A new Council would have to determine its policy. Some believe the most likely outcome would see rates for residential and commercial properties on the peninsula change little, but there might be a significant reduction in rates paid by rural property owners.
Assuming rates were reduced for rural properties, the overall impact on City ratepayers would be relatively small because the peninsula has 3000 rural properties for rating purposes while the City has 122,000 rateable properties altogether.