This page is not a current Christchurch City Council document. Please read our disclaimer.

Christchurch City Council




AT 9.00 AM


Councillor Margaret Murray (Chairman), The Mayor, Ms Vicki Buck, Councillors Graham Berry, Anna Crighton, Newton Dodge, Morgan Fahey, Alister James, Charles Manning and Barbara Stewart.


Principal Adviser Committee Secretary
John Dryden Dennis Morgan
Telephone: 371-1652 Telephone: 371-1437
Fax: 371-1789 Fax: 371-1786






PART A 2. DRAFT BUDGET FOR 1998/99 RR 7006



2. DRAFT SUB-BUDGETS FOR 1998/99 RR 7006

Officer responsible Author
Funds and Planning Manager Paul Melton
Corporate Plan Output: Financial Planning Advice Volume I Page 5.4.4

This report brings together the draft budgets for 1998/99. Work on the budgets has been in hand for the last six months and reflects input from a large number of people from throughout the organisation.

The purpose of the report is to highlight the key factors which have influenced the draft budgets. This report also provides information on the recommended approach, the budget format and budget timetable.

The sub-budgets which the Central City Committee is responsible for are:

* Central City Promotions } Communications
* Central City Marketing } and Promotions Unit
* Car Parking    
* Parks } Central City Projects
* City Streets } Central City Projects

Where there is a mixture of projects relating to various Committees, the Central City Committee projects have a (#) alongside.

As in previous years the pink pages summarise all the significant changes. In addition this year's pink pages also include a section which highlights efficiency gains and a section which highlights any budget restructuring.

The pink pages have been printed off in a supplementary booklet.


The Financial Model which was approved as part of the 1997 Plan projected a 3.66% rate increase for 1998/99 (see page 11 of the 1997 Plan).

The draft programme now being brought forward for consideration includes $1.49M of new items and significant cost increases which were not provided for in the Model. It may be possible to achieve the 3.66% rate figure by funding these items from the unspecified operating sum. The inclusion of any additional initiatives would however put upward pressure on the rates figure.

New Committed Items and Significant Cost Increases

The $1.49M of new items and significant cost increases referred to above are summarised below:

Parklands Library Site $22,200

Although the Parklands Library is not programmed for development until 2002/03 the opportunity to purchase a site early was taken up at the end of last year. The maintenance costs associated with this site relate to ground maintenance and insurance and fire and safety costs for the existing building.

Reactive Maintenance - Water Services $30,000

An additional $30,000 has been provided for follow-up work on the Water Services Asset Management Plan. This work is being done in conjunction with leak reduction repairs.

Education Programme - Water Services $67,000

Funding from the Ministry for the Environment's sustainable management programme expires on 30 June 1998. The draft budget has been prepared on the basis that the education programme will continue at its current level and be funded fully by the Council.

Additional Resources - Art Gallery $52,000

These costs were identified subsequent to the preparation of the 1997 Plan and relate to art conservation, additional resources to meet the exhibition programme and additional framing costs.

Publication Costs $37,500

This item relates to the design and printing costs for the funding, borrowing and investment policies and the Long Term Financial Strategy. These policy statements which are a requirement of the Local Government Amendment Act will be published in a strategic statement booklet.

Housing Review Initiatives $69,500

The Housing Review Team which met during 1997 identified a number of initiatives to be implemented in 1998/99. They include an energy efficiency review, software for better managing the housing assets, a review of rent and cash collection systems and benchmarking. The initiatives which have a total cost of $69,500 were endorsed by the Community Services Committee at its December seminar meeting. The initiatives will be formally reported to the Community Services Committee meeting in February.

New Brighton Mainstreet $40,000

This provision will allow the Council to further progress specific issues raised in the 2005 Report. It will also enable specific support to be given for a Main Street Programme in New Brighton.

Tuam Street Car Park Development Studies $85,000

The above project will enable the potential development of this Council owned strategic property to be fully explored. Preliminary work on this project has already commenced.

Resource Consent Process $120,000

The Council is required to obtain a resource consent in order to apply biosolids to the forests. This provision reflects the likely cost of the consent process.

Landfill Aftercare $85,000

Relates to closed landfill sites and will allow for increased monitoring of these sites. This is to comply with the Resource Management Act.

Plant Costs $54,800

Reflects ownership costs for 10 additional light vehicles as approved in the 1997 capital budget.

Court Lodgement Fees $120,000

As at 1 January 1998 Court Lodgement Fees charged by the Department of Courts were increased from $15 to $25 per lodgement. These relate to parking fines.

Farmers Car Park (Car Parking Budget) $129,225

Reflects net operating costs for seven months of the 1998/99 year.

Canterbury Museum Trust Board $32,274

The Board has written to the Council advising that it is recommending a 5% increase to the 1998/99 levy. This represents a 3% ($32,274) increase on top of 2% allowed for in the Financial Model.

Project Plan Booklets $39,500

At the December Council meeting approval was given to publish project plan booklets for 1999/2000. These booklets will list all projects in a community area and will be map based. A pilot study will be initiated in the current year.

Library Maintenance $56,000

Most of these costs relate to cleaning of enlarged sites like the Central Library extensions.

Rural Fire Fighting Training $25,710

This additional provision has been included in the rural fire output to provide training in order to meet the Rural Fires Act Code of Practice.

Road Network Planning $25,000

There are two components to this item, both of which relate to road network planning. The first ($15,000) relates to the ongoing monitoring and assessment of existing speed limit changes and new speed limit sites and related research. The second ($10,000) relates to pedestrian crossing points and the investigation and design of miscellaneous crossing requests.

Carriageway Resurfacing Net $138,700

Reflects an increase in contract rates which have moved up significantly in 1997. The increased budget provision will meet target service levels as well as recognising more specialist work requirements.

Footpath Maintenance $40,000

Costs have continued to exceed previous budgeted amounts. This increase will ensure a more realistic provision.

Street Lighting $173,850 (Net)

This increase reflects a 2.5% increase in the asset base plus an increase in the cost of power. The new provision also allows for a one-off item of $50,000 for painting central city power poles.

Youth Advocacy $55,000

The social initiatives package which was approved last year funded a Youth Advocate position and support costs for a six monthly period. This additional provision will enable funding for a full 12 month period.

Cost Pressures due to Demand or Growth

In addition to the new committed items and cost increases detailed above there are also pressures due to increased demand or growth. These total $636,880 and are scheduled below:

New Reserves $69,285

New reserves and proposed reserves arising from subdivisions will add an estimated $69,285 to the Parks operating budget.

Halswell Quarry Park $39,765

The Quarry Park has been further developed from the initial 29.5 ha and the development now covers the whole 60.2 ha. There has been a corresponding increase in costs to maintain this asset.

Grounds Maintenance $36,945

Additional grounds maintenance on riverbank reserves arising from the plant programme.

Local Parks Additional Maintenance $25,115

Represent additional maintenance on the 22 extra parks which was not allowed for when the 1998/99 projects were prepared.

City Design - Operational Costs $92,140

Reflects a continuing growth in the unit's workload. Staff numbers are managed up or down on a continuing basis to match the required workload. Increased staffing is self-funding and is financed by fees charged for work done.

Water Supply - Power Charges $20,000

City growth and tariff changes have resulted in the need to increase the power provision for water pumping by $20,000.

Waterways and Wetlands $14,000

An increase in the rate of development and subdivision adjacent to waterways will increase the cost of maintenance associated with the management of riparian areas.

Road Maintenance

Includes the following items:

- Landscape Maintenance $69,500

Reflects the increase in the number of grassed berms being installed as well as additional landscape plots.

- Street Cleaning $26,130

Reflects the increased length of roading in the city.

- Major Pedestrian Areas Cleaning $244,000

Increases have been allowed for cleaning in the central city and suburban malls. This is due to the changing nature of inner city activities and public expectations of cleanliness.


At the Council meeting to adopt the 1997 Plan it was resolved that an efficiency and effectiveness drive be carried out aimed at maximising efficiency gains. This process is well underway and the efficiency gains identified and achieved to date which translate directly into savings have been taken account of in the draft budget. These total $1.02M and cover a wide variety of Council activities. For a complete list see Schedule 1F (attached).




Revenue * $80.28M $79.45M
CCHL Dividend/Interest on Subordinated Debt $19.50M $19.76M

* This item does not include rates.

This year the Financial Model has proved remarkably accurate in projecting total revenue. The most significant variation to the revenue figure relates to car parking and this can be explained in terms of a fee increase of 60c to 80c per half hour in the basic casual charge for parking buildings.


The capital expenditure programme can be summarised as follows:

Net Capital Expenditure $87.0M $82.83M

The draft 1998/99 figure includes $2.60M for unspecified capital expenditure plus an allowance of $749,100 for Community Board capital projects. All inflation adjustments to the draft 1998/99 figures have been funded from the unspecified inflation provision ($1.51M) which was included in the Model projections.

Although the capital smoothing exercise, which was carried out in October, achieved an overall reduction of $19.1M as against a budgeted reduction of $15M, most of this applied to years 2, 3 and 4.

The smoothing reduction achieved for 1998/99 was $1.4M.

The 1998/99 figure also includes the QEII scoreboard ($1M) which was brought forward at the time of the smoothing exercise and additional expenditure approved for the Cathedral Square project ($1.4M).


At the Standing Committee meetings last year, service add ons were separated out into:

- committed new initiatives; and
- uncommitted new initiatives

Committed new initiatives were defined as those costs which the Council was committed to and unable to avoid (eg operating costs associated with the Parklands Library site purchase). Uncommitted new initiatives were defined as initiatives which the Council/Community Board or staff requested.

The 1998/99 approach is very similar in that Units were asked to note on their pink pages, the changes and potential changes using the following headings:

Categories Totals*
- Committed Costs (operating) [included in the draft operating budget] $5.78M
- Increased costs due to increased demand [included in draft operating budget] $0.90M
- New operating initiatives [not included in draft operating budget] $2.60M
- New capital initiatives [not included in draft operating budget] $7.00M
- Efficiency gains [included in draft operating budget] ($1.02M)

*The totals for the Council as a whole.

The categories as they relate to the Central City Committee costs/projects are:

Committed Costs - Operating Budgets ($514,225)

See Schedule 1A (attached). These items reflect the operating costs arising from capital projects, previous commitments made by the Council or cost increases.

Increased Costs due to Increased Demand - Operating Budgets ($10,000)

Schedule 1B. These items reflect city growth and the consequential increased demand for goods and services.

New Operating Initiatives (Nil)

See Schedule 1C (attached). These items are not in the draft budget but have been identified by Councillors, Community Boards or staff for inclusion. They represent bids for the unspecified operating provision.

Bids for the Unspecified Capital Sums ($30,000)

See Schedule 1D (attached). Included within the Model projections is an unspecified amount of $5.2M which is divided equally between 1997/98 and 1998/99. These sums are available to fund some of the items on Schedule 1D.

Efficiency Gains (-$230,000)

See Schedule 1E (attached). This schedule highlights the efficiency gains which relate to the Central City budgets.


The suggested approach to the 1998/99 Draft Sub-Budgets is to:

  1. Confirm that the level of service for each operating output is appropriate.

  2. Consider the proposed initiatives (Schedule 1C) and rank these in order of priority. While the amount of unspecified funding available is small it is important that Standing Committee priorities are known. If Committees fail to express these more arbitrary decisions will be necessary.

The suggested ranking is a 1 to 5 grading:

1 - Top priority
2 - High priority
3 - Priority
4 - Low priority
5 - Lowest priority

Projects should be spread equally by dollar value between the five categories.

A copy of the Strategic Objectives from the 1997 Plan is attached (see Schedule 1H). Committee members may need to refer to these when ranking items.

The Committee should also consider whether any new initiatives can be funded by way of substitution.

  1. Confirm the draft capital programme and consider the priority capital projects (Schedule 1D). If priority projects can be funded by way of substitution then generally the Plan Working Party will take this on board. Those priority projects which do not fall within the substitution category should be ranked using the 1 to 5 categories referred to above. The Strategic Objectives may need to be referred to here as well.

It should be noted that the bids will also be prioritised by the Plan Working Party against bids from all other Committees.


Following the pattern established in previous years, the budget is presented in an output format. (Outputs represent the goods, services or products which are being 'bought' for the community by the Council.) In most cases there is one output per page. Coloured paper has been used to separate the various sections of the budget.

The colours and the corresponding sections are:

Pink - Key Changes Section
Green - Operating Budget
Lemon - Holding Account Section
Blue - 1998/99 Capital Section
Buff - Ten Year Capital Programme
Violet - Fees Schedule

For each output there is a brief description, the objectives for 1998/99 are stated and the measures which will be used to assess whether the objectives have been met are also listed. The budgetary provisions are generally divided into direct costs, allocated costs and revenue. They are always shown on the opposite page to the budget text. All allocations from the Holding Account are cross-referenced back to the Holding Account section (lemon pages).

The budget structures for 1998/99 remain essentially the same as those for 1997/98. Where there are significant changes these have been highlighted on the pink pages under the heading "Restructuring of Budgets".


The next step in the process is for the draft budgets to be referred to the 1998 Plan Working Party in the last week of February to:

consider funding issues; and to

Details of the other steps in the process are set out in Schedule 1G (attached).

Recommendation: That the draft operating and capital outputs be recommended to the 1998 Plan Working Party with any of the new initiatives (operating or capital) being clearly flagged.



Officer responsible Author
Communications & Promotions Unit Manager Susan Selway/Candida Keithley
Corporate Plan Output: Central City Retail Marketing

The purpose of this report is to advise the Committee on the effect of a budget reduction of $150,000 in the City Centre Marketing output and the impact it will have on City Centre Marketing activities.


During 1994 and 1995 consultants were commissioned to study and report on Christchurch's central city. Within their brief they were asked to make recommendations regarding measures the Council should take to arrest the long term decline of this area. The City Centre Marketing Strategy currently in place was developed from those recommendations. The current Marketing Strategy was adopted by Council in March 1995.

The Council resolved at the Annual Plan meeting in 1997 that the City Centre Marketing output budget would reduce by $150,000 for the 1998/99 financial year. The budget was reduced by $20,000 in the 1997/98 financial year.


The City Centre Marketing Strategy was initiated to arrest long term decline and guard against an empty City Centre. At its inception the strategy was positioned as a long term project rather than a short term solution. If the City Centre Marketing budget is cut by $150,000 the Council will be unable to effectively support a key objective of the City Plan 'to maintain and enhance the central city as the principle commercial, administrative, employment, cultural and tourism focus of the City, and the venue for a diverse range of activities'.

City Centres worldwide are in decline and Christchurch's City Centre is no exception. Research indicates that marketing activities are beginning to help counteract this (a decline in visits to the city centre has been reversed and retailers are increasingly supportive of co-ordinated marketing and promotion). However, marketing activities are not yet fully established. While some activities are near the maximum expected participation from retailers, others have a long way to go. For example, at present 35 retailers are participating in and giving money to the Sunday Opening Hours campaign. We expect this could reach at least 100 retailers if advertising is continued. In addition, there is a strong need to set up a loyalty programme for City Centre retailers. The number of retailers participating in the parking card scheme could be doubled.

The proposed budget reduction of $150,000 in 1998/99 represents 50% of the total operating budget for 1997/98. Any reduction in City Centre Marketing activities means there will be:


The proposed budget reduction will have a serious impact on activities detailed in this section.

3.1 Budget comparison 1997/98 to 1998/99 (proposed)

  1997/98 1998/99
Direct Costs $ $ $ $
Newsletter 0 0    
Spring Promotion 25,000 15,000 0 0
Summer Promotion 25,000 13,000 0 0
Autumn Promotion 25,000 10,000 0 0
Winter Promotion 25,000 10,000 0 0
Christmas Promotion 9,000 0 0 0
Retail Events Support 8,000 5,000   0
Retail Guides 20,000 0 50,000 25,000
Retail Promotions 15,000 15,000 61,000 25,000
Opening Hours 85,000 50,000 0  
Publications 15,000 15,000 6,000 6,000
Special Promotions 35,000 25,000 0  
Research & Information 13,000 13,000 0  
Total Direct Costs/Revenue
300,000 150,000 117,000 56,000

3.2 Decrease in effectiveness of Marketing Strategy

Some activities would have to be dropped from the activity plan completely. The remaining activities would have be scaled down. Instead of actively promoting the City Centre we would need to move to a defensive strategy which focuses almost entirely on addressing the barriers to central city shopping. The main priority would be to address weaknesses to ensure the City Centre has a chance to compete. This would include maintaining the opening hours campaign and promoting parking. Promotion of the City Centre at peak retail periods would be minimal, eg during 'Showtime Canterbury' and in the lead up to Christmas. This means we would be unable to leverage economic impact in periods when opportunity is high.

3.2.1 Opening Hours

We would be unable to run an opening hours campaign leading up to Christmas or public holidays. The budget would be insufficient to promote any set of opening hours that retailers agreed to. Therefore the public would be unaware of the new opening hours and would assume that the shops were closed. Also, fewer retailers would take part, as retailers generally only participate when there is advertising to let the public know about new opening hours.

Before the Saturday opening hours campaign 235 retailers (52%) were open till 4 pm. The promotion has successfully pushed this figure up to 311 retailers (70%). A total of 76 retailers extended their trading hours to participate.

With the establishment of the Sunday Opening Hours campaign, we now have 100 City Centre retailers open on Sundays (11am - 3pm) with 35 retailers contributing funding to the advertising.

There would be a reduction in the number of retailers taking part in the Saturday and Sunday Opening Hours campaign as the Council would be unable to provide much financial support towards advertising to inform the public of the new opening hours.

3.2.2 Shopping and Entertainment Guide for customers (including tourists and conference delegates)

Less funding will mean the shopping guide would be of lower quality and we would print fewer guides.

Consequently, there is a strong possibility that we would be unable to produce the annual City Centre Shopping and Entertainment Guide as a number of retailers would no longer be interested in advertising due to the above mentioned factors.

The guides are very popular. Each guide had a print run of 100,000. About 25,000 copies of each guide were supplied to the Canterbury Tourism Council. Last year, the Bars & Cafes guide was so popular City Centre Marketing ran out of stock before the year was up.

3.2.3 Retail Promotion Fund

City Centre Marketing would be unable to set up a loyalty card scheme for City Centre shoppers which we have been planning to introduce to retailers next year.

We would also be unable to support co-ordinated promotions that retailer groups have organised and part funded such as the Sunday Opening Hours campaign and Melbourne Cup Day in New Regent Street.

3.2.4 Christmas Promotion

City Centre Marketing would be unable to co-ordinate or support the free bus day promoting public transport or Santa Claus and his elves who attract families to the City Centre leading up to Christmas.

3.2.5 Parking Promotion

There are now 59 retailers taking part in the complimentary parking card scheme. A total of 35 retailers joined in the 1996/97 budget year while 22 have joined from July 97 to date. We could continue the complimentary parking card scheme, but would be unable to promote the use of parking cards to shoppers. The City Centre Marketing budget related to parking is very important in driving usage of parking buildings. Due to lack of promotion and the expected related decrease in shopper numbers, there is the potential for a major loss in revenue for parking buildings and metered parking.

3.2.6 Special Promotions

City Centre Marketing would be unable to co-ordinate special promotions supporting tactical activities such as Cricket in City Mall, Retail links with festivals and events such as Instant Kiwi World Buskers and Tip Top Ice Cream Teddies in Town as well as conference and convention links.

3.3 Loss of Retailer Support for Strategy

A large decrease in budget at this point in time signals the wrong message to retailers in the city centre. Over the two years since the strategy was put in place, increasing numbers of retailers are supporting the strategy through monetary contribution and/or participating in City Centre Marketing activities. A 50% budget cut would be seen by retailers as the withdrawal of Council support for the City Centre. Retailers would no longer put money or time towards City Centre Marketing activities.

A growing number of City Centre retailers support collective marketing of the City Centre co-ordinated by City Centre Marketing. A heavily reduced budget will precipitate a reversal back to individual promotion. (See attachment for letters/comments from retailers).

3.4 Decrease in Revenue Received from Retailers (See 3.2)

As the strategy has been implemented retailers have been increasingly supportive of co-ordinated activities. This has allowed us to begin to reduce our financial contribution to some projects to a base level, representing 'seeding' funding. In turn this means we are able to move the released finances to new projects and thereby maintain momentum.

At some point in the future it should be possible for Council to reduce funding to a base level and still maintain a portfolio of activities. But this can only be possible once a certain level of activity has been established. We estimate at the current rate of retailer take-up and with Council expenditure maintained it should be achievable after a five year period. At this point the City Centre Marketing strategy has been operating little over two years.

A reduction in budget of this magnitude at this time severely limits the number of coordinated promotions which we can seed-fund. Unfortunately this means that there will be fewer opportunities for retailers to contribute financially to activities. Our revenue potential will drop off markedly. If we reduce council funding prematurely we will lose our initial gains and compromise long term revenue for the project. The estimated loss in internal and external revenue in 1998/1999 if the budget is reduced amounts to $61,000.

3.5 Decrease in Shoppers coming to the City Centre

Since City Centre Marketing Activity commenced, the downward trend in visits to the City Centre has reversed. With a limit on promotion it is likely that the numbers of visitors to the City Centre will begin to decrease again. This is of particular concern as the Cathedral Square upgrade is scheduled to begin in the near future. With City Centre visits declining and Cathedral Square temporarily compromised through the upgrade we risk losing Cathedral Square as the City's focal point. The budget reduction is scheduled at a time when we should be taking advantage of City Centre Marketing activities to maintain interest in the City Centre and protect against loss of patronage.

One of the strengths of the City Centre is the quality and choice of shopping venues. If retail activity in the City Centre continues to decline, businesses will increasingly question their location. Any significant reduction in choice and quality of retail and services may begin a downward spiral as customers no longer see the benefit of shopping in the City Centre. This would also mean a decrease in rates collected from City Centre businesses.

3.6 Loss of Sense of Community at City Level

The City Centre is a common meeting place for the communities in Christchurch. Accessible to all, home to many of our heritage buildings and attractions including the Cathedral, Tram and parks and gardens, the City Centre is a valuable asset. A sense of community at a City level is generated through experiencing and meeting people in the City Centre. Attractions including events and festivals, our growing cafe/bar culture, shopping and professional services as well as facilities such as the Central Library, Art Gallery, Museum and Arts Centre all add value to residents experience of Christchurch. The City Centre as the venue for all these things is a major contributor to civic pride.

3.7 Loss of Key Tourist Attraction

Nowadays, a vibrant City Centre is not only a meeting place for the city's population, but also a source of income through tourism. Approximately 17% of the pedestrian traffic in the city centre is tourism based. It is a well observed fact that tourists prefer to go where the local population go - if locals are conspicuous by their absence then tourists will cease to frequent also.


  1. That the City Centre Marketing operating budget for 1998/99 be held at the 1997/98 level

  2. That the City Centre Marketing budget be reviewed for 1998/99 following an evaluation of the City Centre and assessment of the impact of the Marketing Strategy in 1997/8.
Chairman's Recommendation: For discussion.




Officer responsible Author
Communications & Promotions Manager Candida Keithley
Corporate Plan Output: Central City Retail Marketing

The purpose of this report is to present, for information, a summary of key findings from the 1997 Annual City Centre Marketing survey, carried out by Taylor Baines and Associates and compare this to the 1996 survey.


The survey is carried out annually in September. Overall, results were very positive and indicate that City Centre Marketing activities are having a positive impact on the City Centre through impact on residents. Our objective of supporting the City Plan is therefore being met.


Generally there is little change in the overall pattern for people's reasons for coming to the City Centre, although shopping and movies appear to be increasing as a motivation for visiting the City Centre. There has been no change in the duration of people's visits to the City Centre in the last 12 months. There has been an increase in the likelihood of visitors spending money in the City Centre. This could be partially explained by differences in the employment status and income level between the 1996 and 1997 samples. However, it is unlikely that this explains a change of this magnitude.


The results indicate that the opening hours campaign is making people more aware that the City Centre is open on Saturdays. They also show that while the majority of people know the City Centre is open on Saturday mornings, advertising needs to be continued to increase the number of people who know the City Centre is open on Saturday afternoons.



Chairman's Recommendation: That the information be received.

This page is not a current Christchurch City Council document. Please read our disclaimer.
© Christchurch City Council, Christchurch, New Zealand | Contact the Council