‘Perfect storm’: Tough decisions ahead for council under financial pressure

Wednesday, 18 October 2023

Mayor Phil Mauger says smaller libraries that are just “buildings with some books in” could be temporarily closed.

City councillors are accusing Christchurch mayor Phil Mauger of paving the way for asset sales by making “dramatic” claims about the council’s dire finances.

They say cuts to core council services like libraries and swimming pools, as proposed by Mauger, were so unpalatable to the public they would never get through.

Councillor Jake McLellan said he did not think the council was in quite the dire financial situation as claimed so “dramatically” by Mauger this week.

On Monday, Mauger said the council was in “shit creek financially” and cuts to libraries and swimming pools were on the cards to avoid an 18% rates increase next year.

The proposed cuts were news to many councillors, including Melanie Coker who said the first she heard of it was reading The Press on Tuesday.

McLellan said staff had already managed to get that projected rates increase down by 4 or 5 percentage points through a variety of savings.

“If I knew that already then he (Mauger) must have known that too.”

Christchurch’s Te Kaha stadium will be solely responsible for a 2% rise in rates next year.

Libraries make up just 4% ($54m) of the council’s annual spend and sport and recreation 5% ($74m). Three Waters is 20% ($319m), transport 15% ($238m) and other costs including the Te Kaha stadium and interest costs were 26% ($400m).

Te Kaha was solely responsible for a 2% increase in rates next year, which was about $94 for an average ratepayer. That amount would peak at $209 during 2027-28.

About 8% of the 18% proposed increase was due to increased costs of interest, inflation and insurance, McLellan said.

Mauger also said the council’s debt was so large, at $2 billion, that repayments were $340 a minute or $15 million a month, calculated on 4% interest over 15 years.

He did not rule out selling assets to cover the cost, breaking an election promise.

But McLellan said if the council did decide to sell assets, it would be two to three years before it saw any money from that - too late to get the council through its existing financial challenges.

Putting the two together was “just mischievous”, he said.

Coker agreed, saying Mauger was “absolutely” clearing a path to sell assets.

Councillor Melanie Coker says Mauger is absolutely trying to clear the path to sell assets.

“There is no doubt about it.”

Councillors heard the full extent of cuts proposed at a private briefing on Tuesday. It was one of series of regular briefings the council has had as it developed its 10-year budget, the long -term plan (LTP).

Up until this point the briefings have been recorded and released publicly a couple of days later, with anything deemed sensitive redacted.

Unlike the others, Tuesday’s briefing was not recorded. Following requests by The Press to release it, the council produced a heavily redacted presentation, which left out the areas that could be cut.

Coker said there was a real lack of transparency.

She said the proposed cuts were not mentioned in previous public briefings and only came up during a confidential briefing.

The council proposed cutting library hours in the last draft LTP, but there was a public outcry and it backed down.

Coker said she did not think library cuts would be “palatable for the public” this time either.

The Christchurch City Council has 20 libraries including Spreydon Library in Barrington.

Council chief financial officer Leah Scales said Christchurch could not outrun the economic and environmental forces that were affecting the country and the world.

“We’re in a perfect storm, and it’s not a short-term blip.”

She said the council had reached a point where tough decisions had to be made and Mauger had given a few examples of possible cost-saving options.

“The 18% rates rise is a starting point to show what would happen if the council made no changes to its current programme. It is not the final figure proposed and councillors will consider a wide range of options to get this down.”

Barbara Clarke, who spent 35 years as a librarian and is now a member of the Friends of Christchurch City Libraries, said she was “shocked” by Mauger’s comments.

Libraries were not “just a building with books in it”, as Mauger stated, she said.

They were a place where people could meet, sit down and chat. They also provided computers for those that did not have access.

“Libraries provide services to pre-schoolers through to pensioners.”

The council’s annual ratepayer survey showed just how valued the council’s 20 libraries are. Some 99% of respondents said they were satisfied with the service.

The same survey showed just 43% of people were satisfied with the council’s performance.

The council’s finance committee chairperson, Sam MacDonald, would not be drawn on whether he supported cuts to libraries and pools or if he would support asset sales.

He said it was still early in the process and while the mayor was entitled to make comments, he did not have a view.

Last year, MacDonald said both he and Mauger were not interested in cutting community services to achieve low rates rises.

“Things like libraries and pools, all of that stuff is sacrosanct, they’re not going to move,” he said.