Councillor upset rates rise on way for Christchurch residents

A city councillor is upset that a rates rise is on the way for Christchurch residents, in spite of the economic challenges posed by Covid-19.

In its draft 2020/21 annual plan, the city council is proposing a rates increase of either 3.5 per cent, 4.65 per cent or 5.5 per cent.

The recommended budget caps capital spending at $400 million, reduces the organisation's running costs by $23 million, and increases the borrowing by $102 million. It also sets aside $118 million for the Metro Sports Facility and Multi-Use Arena. 

• Rates set to increase in Christchurch next year

But councillor James Gough, who has previously advocated for a zero rates increase along with five other councillors, said he was disappointed not to see the zero rates rise as an option.

"We felt that we weren't a minority in the community but it looks like it might be the case around the council table unfortunately," he said.

Gough said the council must do more to cut its capital and operational expenditure in order to save money.

Service, staff cuts predicted

In the draft annual plan report, the council staff said a zero rates rise was in conflict with the central government's policy on New Zealand's economic recovery.

"A zero rates increase would have severe impacts on both back office and frontline services, maintenance and capital works, as well as levels of service," the report said.

"There would be an unprecedented level of staff redundancy and commensurate redundancy costs in the same year that savings are being sought."

Prior to the Covid-19 lockdown, the council was in the process of consulting on a draft annual plan which provided for a 4.65 per cent rates increase.

Council staff recommended an overall rates increase of 3.5 percent and an average residential rate rise of 2.23 per cent.

For an average house with a value of $508,608 that would mean paying an extra $1.19 a week, or $62.05 a year, the council said.

"We recognised that we had to reduce the average rate increase of 4.65 per cent proposed in our initial draft plan, given the gravity of the situation that the organisation and our ratepayers are facing," said council chief executive Dawn Baxendale.

"The revised plan we will be recommending to council reflects the very different financial position and social and economic environment we are now in as a result of the Covid-19 pandemic."

Once a revised draft 2020-21 Annual Plan has been adopted, a new round of public consultation will be undertaken, starting on June 12.

The council is not due to finalise its budget until the end of July.