A grim warning to be prepared
for a bigger rates bill has been issued by Christchurch City
The city council is over budget and predicts it will be $9.4
million in the red by June.
If they can't find another way of reducing costs, earthquake
weary ratepayers could be facing a 9.3 per cent rate increase
instead of the budgeted 6.5 per cent increase.
Finance committee members will consider the report on Tuesday
at their first meeting for the year.
The report says the cash operating deficit remains the "main
financial concern this year".
"If the deficit cannot be found from operating savings or
increased revenue in the next six months, options to fund it
include increasing rates for 2014-15 by 2.8 per cent over
next year's current draft planned increase of 6.5 per cent."
The culprits it identifies are the consents debacle and
indemnity insurance, earthquake related rates remissions and
legal costs and interest costs.
But finance committee chairman Raf Manji has down played the
"It's just really stating the obvious - if we can't find the
savings then this could result. Staff are just being prudent
and advising of the ramifications of the current
predicament," he said.
"I have categorically instructed staff that they are to keep
the rates increase within the budgeted figure.
"A small amount of belt tightening will deliver significant
savings," he said.
He could not state specifically where savings were.
"They are everywhere," he said.
However the news comes as no surprise to former city
councillor and chairwoman of the finance committee Helen
She said it is a direct result of the consents debacle.
Crown manager Doug Martin was brought in by the Government in
July after International Accreditation New Zealand (Ianz)
revoked the council's consenting accreditation.
"That $5 million for the building consent fiasco was a direct
cost not planned in the council budget. I would be surprised
if it could be found by savings in other areas," she said.
Last July she said the finance committee had looked at the
same problem but had decided to see if it would improve with
"We discussed this and the wisdom of the committee decided to
see how it would pan out. The staff felt that if some areas
were under, which some of the earthquake budgets are, it may
even out. Personally I would look at how there could be cost
savings but the view of the committee was to keep an eye on
it," she said.
The report says that earthquake rebuild expenditure,
earthquake emergency and response borrowing, capital works
programme are all below budget this year.
- By Shelley Robinson
of the Christchurch Star