Christchurch rates increase on the up and up
Wednesday, 24 January 2024
Christchurch residents are now looking at a 15.8% rates increase in July as the council also considers cutting some community grants and selling some red-zoned Port Hills land.
The increase is higher than the 11.2% signalled in December for the 2024-25 year, but lower than the 18% mayor Phil Mauger declared in October.
The figure, released on Tuesday during a Christchurch City Council briefing on its 10-year budget, the long-term plan (LTP), is likely to change before being confirmed at the end of June.
A draft LTP will be released on February 9 and the council will meet to adopt it for public consultation on February 14 and 15.
A 15.8% increase amounts to an additional $534 a year or about $10.20 a week for the average property worth about $765,000. It will push the cost of annual rates for an average property to $3904, or $75 a week.
The council is attributing the rates rise to increasing costs in inflation, interest and insurance costs as well as the cost of the stadium Te Kaha, which is making up 3.5% of the increase.
A reduction in the dividend from the council’s investment company Christchurch City Holdings Ltd can be attributed to a 3.54% increase.
The council had initially budgeted for $57 million in dividends, but was now expecting $33m.
A December decision not to pursue a business case, which would ultimately have allowed CCHL to sell assets, meant the dividend projections were at the lower end of what was forecasted, the council said.
In a bid to save some money, the council was considering the future of five contestable funds that grant money to various groups.
The funds are city placemaking, biodiversity, sustainability, heritage and accessibility. Cutting all the funds would save the council $1.47m in the 2024-25 year and $1.2m the following year.
Staff have come up with a series of options regarding the funds including closing all of them, keeping some operating and reducing the amount they grant.
However, staff have recommended against closing the biodiversity fund because it would risk negating past investment, especially with weed and pest control.
Councillor Sara Templeton said she was wary of cutting funds to groups that did good work in the city, especially when they did it on the “smell of an oily rag”.
The council would have to pay way more to get the work done itself, she said.
In another way to save some money the council was looking at selling 47 properties it no longer needed. About 40 of those are properties are in the Port Hills and were red-zoned following the 2010-11 earthquakes.
There was no detail in the briefing how much money the council hoped to gain from the sales.
Last year, the council approved the sale of 16 Port Hills residential red zone properties.
Council head of city growth and property Bruce Rendall said on Tuesday that questions had been raised by councillors about whether the properties could be offered back to the previous owners first.
He did not believe the council should do that, because it would be too difficult to find them and many people had moved on.
Rendall said they were not the same properties that people left. The risk areas had been taken out.
Mauger said the council was in the “financial doldrums” and councillors should not make it harder for staff to sell the properties.
The council is also considering winding up its $104m capital endowment fund. The fund was created in 2001 using $75m of the $175m the council received from electricity lines company Orion selling its North Island gas network.
This financial year the council allocated $4m from the fund to a variety of groups including ChristchurchNZ, which received $1.5m.
Councillors asked staff for a more detailed report on winding up the fund, so they could make an informed decision.
Rates increases for the following three years are sitting at 8.1% for 2025-26 and then 4.3% and 3.62%.