Christchuch residents likely to be hit with higher than expected rates rise

Christchurch residents are staring down the barrel of a larger rates rise than anticipated.

Christchurch City Council originally forecast a five percent increase for the next financial year.

The initial figure given was 14.6 percent, but a round of budget cuts meant it had already shrunk to 8.9 percent, councillors were told at a public meeting today.

The $164 million was mostly taken from Three Waters and transport and waste management.

Council chief executive Dawn Baxendale cautioned the final rates figure was still likely to change, but she thought it would be impossible to get it as low as five percent.

Christchurch City Council chief executive Dawn Baxendale.
Photo: Supplied / Christchurch City Council

“A lot has changed since we adopted our Long Term Plan 2021-31. Inflation and interest rates keep climbing, the labour market has tightened, and supply chains are still a headache,” she said.

“All this has led to the costs for some big projects increasing beyond what we planned for, and challenges in delivering them.”

Staff recommended the council kept the budget at the current $390m, as there were not likely to be benefits from slashing it further.

There would be very little impact on rates from more cuts, with an approximate 0.1 percent drop forecasted, staff said.

They also warned councillors further reductions would likely exacerbate a “budget bulge”, or push significant rate hikes into future years.

This could also extend some council project deadlines.

“We don’t want to charge rates now for projects that we cannot deliver due to supply chain issues or labour shortages,” Baxendale said.

“We want to stress that just because we’re pushing the spending on certain projects out to future years, it doesn’t necessarily mean the project is slowing down or will be delayed.”

Delays were an issue the council was already grappling with, having announced on Friday that Parakiore, New Zealand’s largest indoor sports and aquatics facility, will be opening in 2025, instead of next year.

Potential cuts to user charges, levels of service and either cuts or deferrals for some council grants were also debated in the meeting.

However, it was noted there were more properties eligible to pay rates in the city than previously forecast, which may help keep rates low.

A re-evaluation of the budget will be done in January, with public consultation expected to take place for four weeks in March.