Councillors consider ways to reduce an almost 9% rates increase

Wednesday, 27 November 2024

Christchurch ratepayers are facing an 8.7% rates increase next year as councillors put pressure on staff to find more ways to cut costs.

One councillor suggested selling the money-making He Puna Taimoana hot pools in New Brighton, while another talked about putting the Lichfield St car park on the market.

Another wanted the council to consider dropping the level of services it provides to the public.

Pausing the Christ Church Cathedral levy for one year has already been built into the projected increase by Christchurch City Council staff, but this has only reduced rates by 0.15%.

Staff have also suggested using $6m of a forecast operating surplus to reduce the rates increase, rather than use it to reduce the council’s ballooning $2 billion debt.

The staff suggestions could reduce the rates to 8%, but would almost double the projected increase for the 2026-27 year from 5.8% to 10.2%

Mayor Phil Mauger told councillors they needed to weigh up the flow-on impact of reducing rates by using short-term ”sugar hits”.

“In two years time we are going to get hammered.”

The council’s 10-year budget, the long-term plan (LTP), projected an 8.48% rates increase for 2025-26.

The increase includes a number of figures the council could not influence, including 3.64% inflation, 1.75% for Te Kaha stadium, 2.7% for interest and loan repayment costs.

Councillors raised several possible ways the council could save money, but the council’s finance team said it would be difficult to make any material change to rates without looking at services and making significant changes to the capital programme.

However, staff said both of these would trigger consultation and involve amending the LTP, which could not be done before July 2025, when the council legally had to confirm the 2025-26 rates increase.

Councillor Andrei Moore wanted to know what changes could be made to the levels of service without having to amend the LTP.

But head of finance Russell Holden said any changes significant enough to reduce the rates increase would trigger an LTP amendment.

Councillor Aaron Keown said the council should sell He Puna Taimoana hot pools in New Brighton to a buyer like Ngāi Tahu Tourism, which would grow tourism in the area.

“With another operator It might be better for the area especially if we throw them a consent to build a nice big hotel across the road.”

Councillor Celeste Donovan questioned why the council would sell the pool since it was the only community facility that was making money.

Keown responded: “Yeah, so it means it’s got value to sell. No-one wants to buy a noose.”

Councillor Sara Templeton asked about selling the Lichfield St car parking building.

She said the issue was raised by councillors last year, but was not included in the LTP.

Council chief executive Mary Richardson said staff were looking into it.

Moore also asked if the council could redirect the $5m it had already collected for the Christ Church Cathedral into reducing rates.

Chief financial officer Bede Carran said there were legal issues related to what the money could be used for, because it was collected from ratepayers to help with the cathedral restoration.

The cathedral is being mothballed indefinitely following an escalation in rebuild costs.

In 2017, the council agreed to grant the project $10m and the following year introduced a 10-year ratepayer levy to fund it. Each rate-paying household has contributed $6.52 a year since.

Some $3m has already been paid out and the council has $5m collecting interest. The long-term future of the money has yet to be decided, but staff have recommended the council not charge the rate next year and consider further years at a later date.

Mauger said one day the cathedral restoration will get going again and he believed the council should hang on to the money.

An increase in the number of households paying the rate meant the council would reach the $10m before the 10th year (2027-28) anyway.

Given the rates impact of the Te Kaha stadium (1.75% next year), councillor Yani Johanson asked what the council had done to get the 24,000 people who signed a petition calling for a bigger stadium, to make a contribution.

“If we sold 25,000 seats for $1000 each, we’ll raise $25m. We need to start looking at different ways to offset that Te Kaha cost.”

A draft annual plan will be released for consultation in February before being adopted in late June.