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Daily rates in Christchurch about the cost of a cup of coffee

23 March 2007

An average Christchurch residential ratepayer will pay an additional $1.49 a week with the increases proposed in the Christchurch City Council’s  draft annual plan for 2007/08.

Christchurch residents will shortly have the opportunity to have their say on the draft annual plan and the draft 2007 Amendments to the Long-Term Council Community Plan (LTCCP) 2006-16.

At today’s Council meeting it was decided that the two documents will go out for public consultation from April 11 to May 11.

The draft Annual Plan contains the Council’s 2007/08 budget to deliver the levels of service agreed upon in the LTCCP last year. General Manager Corporate Services, Roy Baker, says that the rates on an average residential property worth $260,000 will increase from the present $1176 a year to $1254 a year.

“Christchurch rates are the lowest of all the metropolitan councils in the country. The average residential property owner is paying $3.43 a day for rates – less than a cup of coffee,” he says.
“For that they get a multitude of services fitting of a world class city, including roading, footpaths, sewer, the best drinking water in the country, parks and recreational facilities to name a few.”

Mr Baker says the Council is proposing an operating budget expenditure of $387.592 million, which requires a rates revenue of $221.093 million. This equates to an overall rate increase of 7.35% which is about 0.5% more than was flagged in the LTCCP. 

Mr Baker says extraordinary  increases in costs are a challenge for all local authorities.  For example, construction-related costs have risen significantly more than forecast: road materials 10.3%, fuel 6.5% and manual labour 6.1%. 

A combination of cost cutting measures across the Council organisation and an additional $2 million dividend from Christchurch City Holdings Ltd (CCHL) have helped keep the rate increases to this level. The increased dividend from CCHL is not a one off and will be ongoing.

The LTCCP remains largely the same but there are four key changes proposed in the 2007 amendments:

  • A significantly revised Development Contributions Policy (DCP)
  • A funding proposal for developing Jade Stadium
  • A notice that the Council intends to sell an endowment property near Methven
  • A proposal for the establishment of new Council-controlled organisations.

The DCP has been revised to find a fairer way of assessing and collecting contributions from developers towards the costs of creating new reserves, network and community infrastructure to cope with growth. It has been frozen while a working party consisting of development industry representatives and councillors have reviewed the policy.

The amended policy proposes to increase the contributions paid and phase in these charges over the next three years. Developers would pay annual increases of 28%, 23% and 18% in 2007/08, 2008/09 and 2009/10 respectively. Each year the base costs of providing new infrastructure would also be reviewed and could result in additional increases.

The proposal for funding a proposed $60 million upgrade of Jade Stadium would see the Council lend $40 million to Jade Stadium Ltd progressively over the period 2007-2010. The $40 million loan will be rates neutral because parent company Vbase will pay interest to the Council covering its costs and repay the loan over a period of 20 years. The Council would also underwrite a further $20 million funding requirement so the stadium development could be completed in time for Rugby World Cup 2011. Council will work with Jade Stadium to fund this underwrite from other sources such as grants and central government.

The intention to sell the endowment property “Cairnbrae” will allow the Council to implement a decision made last December to sell the farm and reinvest the proceeds for the benefit of the city.

The establishment of new Council-Controlled Trading Organisations (CCTOs) will enable CCHL and the Council to respond quickly to new initiatives. Any new initiative will be brought back to the Council for consideration before any decision is made to proceed.

Until Council approves any new specific initiatives the CCTOs will be “not trading.” One of the new CCTOs will be used for the ownership and leasing of the new civic building.

The two documents will be available from council libraries, service centres and on-line at the Council website by 10 April. Submissions close on 8 May. Hearings will be held from 28 May to 5 June. Following consultation, the finalised documents will be issued no later than 30 June 2007.

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