Pause on cathedral levy proposed to help rein in rates rise

Friday, 14 February 2025

Christ Church Cathedral has been mothballed since December as the restoration team struggle to raise money to finish the work.

A Christchurch city spending plan that seeks to keep rates increases low - but opens the door to paying more on tackling debt - could see a levy that ratepayers pay for the Christ Church Cathedral paused.

That proposal came despite councillors hearing on Wednesday it was “highly” likely the reinstatement team would ask for funds in the next 18 months.

The Christchurch City Council’s budget for the year beginning July 1 was set in June 2024 as part of the council’s long-term plan (LTP), a budget that is reviewed annually.

City councillors spent hours on Wednesday working through ways to save Christchurch residents money on their rates bills.

The draft plan - which councillors agreed on Wednesday - explains what the council proposes to spend over $1.4 billion on in the coming financial year.

That includes a capital spend of $735 million for city infrastructure and facilities and $718m for day-to-day operational spending. Combined, it is $53.4m more than the council forecast last year.

Part of the increase is due to the Government imposing new levies for water services regulators - an unexpected blow which landed in December to the tune of $2m a year, or an 0.28% rates increase.

It also incorporated a revised inflation forecast and increases in general operating and staffing costs, as well as the decrease in insurance premium and the $85m wastewater treatment plant insurance settlement.

At Wednesday’s meeting councillors reduced the proposed rates rise for next year from 8.93% to 7.58% - or an extra $5.80 a week for the average household - by agreeing to push the difference onto the following financial year.

The council has spent several months trying to cut costs. However, a staff report found that material savings would most likely require significant changes to levels of services - something the public opposed during the LTP last year, and would trigger a new LTP to accomplish.

One way the council said it could lower the rates increase was pausing the Christ Church Cathedral levy, which costs the average household $6.52 a year.

But some ideas could lead to rates increases, depending on the level of public support.

A new aircraft hall could be built at the Air Force Museum in Wigram.

That included an option to pay more rates now on renewing infrastructure instead of getting loans to cover it and adding to council debt.

It would speed up the council’s strategy to stop relying on loans to cover infrastructure costs - a goal set for 2032 - but an extra $1m a year would increase rates by 0.13%, or about $5 annually per average household.

According to a draft consultation document, an extra $1m spent on renewals now would save ratepayers $410,000 in interest and debt repayment by 2031.

Residents - who can give their views on the plan from February 26 - will also be asked about a $5m grant to go towards a new aircraft hall at the Air Force Museum in Wigram,

Councillor Mark Peters was passionate about the grant, saying the museum was an important destination and resource. The money would not be needed until after July 2027, and had a rates impact of 0.04% over two years.

The council also wanted feedback on the draft climate resilience fund, which was approved last year - $115m will be collected through rates over 10 years - but councillors are yet to decide how the fund will work, what it could be used for, and how long to hold the funds in reserve before using it.

Not every idea councillors pitched on Wednesday made it across the line.

Because the cathedral restoration is on hold - with no restart date in sight - Cr Andrei Moore wanted the council to use $5m it had raised for the project on lowering rates.

However, chief executive Mary Richardson told councillors she spoke with the chairperson of the cathedral reinstatement team on Wednesday, and there was a “high likelihood” they would call on those funds in the next 18 months.

Councillors were told that because the council had already committed those funds, to return the $5m to ratepayers would effectively mean the council was borrowing from its own fund.

If the reinstatement team asked for the money, the council would have to borrow from elsewhere to pay, which posed a “significant risk”.

Steve Wakefield, a director of Christ Church Cathedral Reinstatement Ltd, told The Press nothing was confirmed but there were ongoing discussions about resuming some parts of the project.

Cr Tyrone Fields also failed to get a question into the plan about funding Lyttelton Museum project, but said he would keep pushing for the “very worthy project”.

Not including the adjustments made on Wednesday, the council plans to spend 28% of it’s budget on three waters infrastructure and 17% on transport infrastructure.

The next highest grouping of services was ‘other’ at 13%, which largely includes the Te Kaha stadium and IT projects.