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MINUTES
115TH MEETING
OF
THE CHRISTCHURCH CITY COUNCIL
MINUTES OF THE PROCEEDINGS OF THE CHRISTCHURCH CITY COUNCIL
AT A MEETING HELD AT 2.00 P.M. ON WEDNESDAY 3 APRIL 1996
PRESENT: The Mayor, Ms Vicki Buck (Chairperson).
Councillors Oscar Alpers, Carole Anderton, Graham Berry, David Buist,
David Close, Graham Condon, David Cox, Anna Crighton, Newton Dodge,
Carole Evans, Morgan Fahey, Gordon Freeman, Ishwar Ganda, Pat Harrow,
Ian Howell, Alister James, Lesley Keast, Charles Manning, Garry Moore,
Margaret Murray, Denis O'Rourke, Gail Sheriff, Barbara Stewart
and Ron Wright.
APOLOGY: An apology for lateness was received and accepted from Councillor Morgan Fahey, who arrived at 3.02 p.m.
1. SUPPLEMENTARY ITEMS
The Mayor referred to the following supplementary items which had been submitted for consideration at the present Council meeting:
* Supplementary report of the Vision Statement Subcommittee.
* Report dated 3 April 1996 by the Director of Finance on further changes to the draft Annual Plan.
The Mayor advised that the items concerned had not been circulated with the main agenda for the reason that in both cases the relevant information was not available until after the agenda had been prepared and circulated, and that in view of their relevance to the present meeting they could not be deferred to a subsequent meeting.
It was resolved that the two items listed above be received and considered at the present meeting.
2. CONSIDERATION AND ADOPTION OF DRAFT ANNUAL PLAN
FOR 1996/97
Consideration was given to the following documents:
(a) Report of the Strategy and Resources Annual Plan Working Party.
(b) Draft Annual Plan 1996/97.
(c) 1996/97 Draft Budget Tables.
(d) Report by Director of Finance, dated 27 March 1996.
(e) Supplementary Report by Vision Statement Subcommittee.
(f) Further Report by Director of Finance, dated 3 April 1996.
Councillor Close then made the following statement as the Chairman of the Strategy and Resources Committee:
"As is the City Council's custom, the Annual Plan has gone through a long and thorough process. It began with input from Community Boards and Standing Committees, and continued with research and reporting by staff, scrutiny by Standing Committees, and about 35 hours debate and examination by the Strategy and Resources Committee. Councillors are grateful to the City Manager and staff for the preliminary work which they carried out this year, particularly on the smoothing of the capital works programme and the separation of new ventures and enhanced services from the basic programme. This greatly facilitated the work of the elected members.
The 1996/97 Annual Plan builds on the success of the past, and is innovative, realistic, and responsible.
Christchurch has been known for decades as the Garden City, and in more recent years has become noted for its festivals and its inner city developments. The Plan builds on the city's past success by making provision for 22 new parks, modest additions to the festival programme, and enhancements in Worcester Street east.
The Plan also contains significant innovations. There is a clear intention to provide more directly for children in special road safety programmes and in the pre-school outreach from our community libraries. There is recognition of the need to provide better community recreation programmes for people of all ages. In addition, there are new ventures to improve our care for the environment in an active waste minimisation programme and in the operation of an electric shuttle bus in the central city.
The Plan is also realistic. It has a revised capital works programme based on updated costings, a provision of 2% annually for inflation, and an assessment of how much work can be achieved in a particular financial year. The operating budget also contains an annual 2% allowance for inflation.
Above all this is a responsible plan. There is ongoing funding of the basics - roads, water, sewerage. Borrowing for the major enhancements and for other capital works has been allowed for in a carefully planned debt management programme. Some concern has been expressed over the level of borrowing in 1996/97 and in 1997/98. I would point out that this borrowing is at the level envisaged in the 1994/95 and 1995/96 Annual Plans which were subject to public submission and were adopted by the Council. The key set of figures for understanding the Council's borrowing is the net debt figure to be found on the financial summary (page 10). An examination of those figures reveals that the Council's projected net debt of $245M in the year 2000/20001 is $2M less than that envisaged in last year's Annual Plan. However, it must be pointed out that the debt repayment programme is based on the Council achieving an operating surplus of about $7M a year by the end of the century. This operating surplus, in turn, is dependent on the series of projected rate increases set out in the Annual Plan unless, of course, equivalent cuts are made in ongoing operating expenditure.
Concern over the costs of some of the enhancement projects is understandable. The Projects and Property Committee put a firm cap on expenditure on the Convention Centre and it would be helpful if a similar course of action was adopted for the Entertainment Centre. Councillors will also have noted a significant increase in the estimated cost of the new Art Museum, but I would point out that the increased expenditure for the enhancement projects is matched by a corresponding increase in the projected funding from non-Council sources. If the projected revenue does not materialise, then the Council would have to make a deferment of certain projects in a future Annual Plan.
The staff and the various Committees involved in the budget process deserve congratulation for the determination and ingenuity with which they have reduced the rate increases projected from now to the end of the century. The projected increases, which now include a 2% allowance for inflation, are nevertheless below last year's projection by an average of about 1%. It is tempting for some Councillors to attempt to reduce this year's projected rate increase by resorting to simple cuts in the coming year's expenditure. I will draw the attention of Councillors to the fact that we will be deceiving ourselves if a reduction in the coming year's projected rate increase produces a higher increase the following year.
The revaluation of all properties last year by Valuation New Zealand resulted in relatively lower increases for commercial property and significantly higher increases for rural property. Residential and industrial property both increased by an average of 18% in value, but within these sectors there are wide variations, it being very clear that flats increased in value significantly less than single dwellings. As for the effect on the ordinary residential ratepayer, the best guide is the increase for the median dwelling, which is estimated at $36 per year, or 69 cents per week, if the rate increase is set at 3.9%. However, a series of amendments which I intend to move will reduce the projected increase to about 3.5%.
No doubt rural ratepayers will be disappointed by the large increase which they have in their rates bill. This is purely a result of the steep increase in property values in the rural areas, presumably because of the demand for lifestyle blocks. One important change has been made in this budget to allocate costs more fairly as between rural and city ratepayers; about $1.6M of loan servicing charges for water, sewerage, and land drainage has been charged to separate rates rather than to the general rate. It is important for everyone to understand that rural ratepayers do not get charged for services which are not available to them. Rates on sample properties in the rural and urban sectors show that rural properties of twice the value of urban properties pay the same rates.
Much has been made in some quarters of the need to keep rate increases within the rate of inflation. The draft budget essentially achieves this, as the annual rate of inflation peaked at 4.6% in June 1995, though it had fallen away to an annual rate of 2.9% by December (New Zealand Institute of Economic Research, Consumer Price Index). I have pleasure in moving the adoption of a budget which is innovative, realistic and responsible. I look forward to a full and open debate on amendments which Councillors may wish to move."
Councillor Close then moved:
"1. That the recommendations made by the Strategy and Resources Annual Plan Working Party be adopted, subject to the adjustments referred to in clauses 2, 3 and 4 below.
2. That approval be given to the changes outlined in the memorandum from the Director of Finance dated 3 April 1996 relating to:
* Adjustment to operating deficits (page 10).
* Housing - cost of service statement (page 46).
* City Streets - cost of service statement (page 27).
* Parks - capital programme (page 76).
3. That as a recycling scheme could not be implemented before the 1997/98 year the provision in the draft budget be amended by:
* Reducing the operating provision in 1996/97 by $500,000.
* Deleting the capital provision in 1996/97 by $500,000 and adding this amount to the provision in 1997/98.
4. That to take account of increased production by Selwyn Plantation Board Limited the provision for dividends be increased by $150,000 in 1996/97 and by $400,000 in 1997/98 and thereafter."
The motion was seconded by Councillor Moore.
Councillor Murray moved by way of amendment:
"1. That the increase in the 1996/97 rate level should aim to achieve no more than a 2% rate increase, above the 1995/96 rate level.
2. That the draft Annual Plan be referred to the City Manager, who will report to the Strategy and Resources Committee on reducing the budget increase.
The City Manager will focus on all areas of expenditure, with particular emphasis on:
(1) All areas of expenditure, which exceed 2% increase.
(2) Any major projects which are exceeding budget and may have to be rescheduled for later years.
(3) That the envisaged borrowing of $51.51M for 1996/97 is too high and that the City Manager have the figures re-analysed for a more appropriate level.
3. That Councillors Freeman and Cox be co-opted to the Strategy and Resources Committee for this review."
(3.02 p.m. Councillor Fahey arrived)
On being put to the meeting clause 1 of the amendment was declared lost on division no. 1 by 12 votes to 13, the voting being as follows:
Against (13): Crs Alpers, Anderton, Close, Condon, Crighton, Evans, Ganda, James, Keast, Manning, Moore, O'Rourke and the Mayor.
For (12): Crs Berry, Buist, Cox, Dodge, Fahey, Freeman, Harrow, Howell, Murray, Sheriff, Stewart and Wright.
On being put to the meeting clause 2 of the amendment was declared carried on division no. 2 by 13 votes to 12, the voting being as follows:
For (13): Crs Berry, Buist, Cox, Dodge, Evans, Fahey, Freeman, Harrow, Howell, Murray, Sheriff, Stewart and Wright.
Against (12): Crs Alpers, Anderton, Close, Condon, Crighton, Ganda, James, Keast, Manning, Moore, O'Rourke and the Mayor.
On being put to the meeting clause 3 of the amendment was declared lost on division no. 3 by 12 votes to 13, the voting being as follows:
Against (13): Crs Alpers, Anderton, Berry, Close, Condon, Crighton, Ganda, James, Keast, Manning, Moore, O'Rourke and the Mayor.
For (12): Crs Buist, Cox, Dodge, Evans, Fahey, Freeman, Harrow, Howell, Murray, Sheriff, Stewart and Wright.
In subsequent discussion, it was agreed that the Strategy and Resources Committee should meet again to further consider the draft Annual Plan early in the week commencing Monday 15 April, with a special Council meeting to consider the Committee's resulting recommendations being held towards the end of April.
3. CONCLUSION
The meeting concluded at 4.15 p.m.
CONFIRMED THIS 24TH DAY OF APRIL 1996
MAYOR