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Christchurch City Council Media Release 24 March 2000

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.

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