17 Oct 2023

Christchurch council has 'serious financial issues', rates rises on the cards

From Checkpoint, 5:11 pm on 17 October 2023

Christchurch is looking down the barrel of an 18 percent rates increase if it does not make some major cost savings, the mayor says. 

The Christchurch City Council is working on its Long Term Plan (LTP) for 2024 to 2034. 

Mayor Phil Mauger said the plan has started out with a proposed 18 percent rates increase, which he says was unacceptable. 

He told Checkpoint that the city was currently $2b in debt, which he tried to simplify to explain the severity of the situation.

"At Christchurch City Council we have got some serious financial issues.

"I went to a bank manager and said, 'I want to borrow $2b and pay it back over 15 years, what are the repayments?' and it came back at $15m a month... which turns out to be $340 a minute which is very scary and that's what I want to crystallize in our people's heads how serious this is."

"We've got a lot of borrowings that we had from the earthquake... that we still haven't managed to knock over."

Mauger said that the council had to look at every way of saving money and that "everything is on the table".

The 18 percent rates rise was a starting point and "no decisions have been made", he said.

Mauger said every part of council had come in to share where there were possible savings to be made and any decisions made would be by the council as a group.

The council did have a lot of land assets that were surplus to requirements, and strategic reviews were also underway on council assets such as the port and airport, he said.

Councillor Jake McLellan said he thought there was a bit of fear mongering going on in order to open the door to asset sales. 

"In my view there is element of manufactured disaster here to justify the sale of our city's assets, and I just don't think that is appropriate."

He said even if asset sales went ahead it would take several years for the money to become available to the council. 

McLellan said while the planning process started with the possibility of an 18 percent rise they had already found areas to make cuts to reduce the rates increase. 

"The reality is I don't think the people of Christchurch have the will or the appetite to close libraries or swimming pools. And I certainly wouldn't like to see that happen. There may be some things we can defer or delay, there may be some capital works that we could slow down. But in terms of those bread and butter council services, I certainly won't be voting to shut pools or libraries."

Mauger said once the new government was formed, he would be going to the minister for local government to ask: "How can we work with you to get a better result for everybody?"

"I just want to go up there and fly... greater Christchurch's flag," he said.

A draft LTP will go out for public consultation in February, and then a final LTP completed by mid next year.