Rates rise for Christchurch residents

Christchurch mayor Bob Parker said the city council had worked hard to minimise the rates increase, while ensuring it could move the city forward. File photo / Simon Baker

Quake-battered Christchurch residents will be hit by a 5.34 per cent rate increase to cover the city council's shortfall.

There will also be another 1.76 per cent rate increase over five years to repay the deficit, which is expected to reach $73.8 million over the next three years.

Christchurch City Council today adopted its Annual Plan and budget for the coming year.

The council's normal Annual Plan process was derailed by the February 22 earthquake, causing a complete revision of budgets, capital projects scheduling and levels of service.

Even though the Annual Plan process was interrupted by the February earthquake, the Council said it was determined that residents should still have the opportunity to give feedback on the proposals outlined in the draft plan.

As a result of the feedback, a number of changes were made to the plan. This included an addition to the rates remissions policy for property owners worst-affected by recent earthquakes.

The policy will offer:

* 40 per cent rates remission for residential properties that are unable to be occupied.

* 30 per cent rates remission for businesses located within the cordoned Red Zone.

* 30 per cent rates remission for businesses outside the Red Zone that can not be occupied because they are adjacent to dangerous buildings.

Also included in the budget was a grant of $100,000 for the Gap Filler project to fund at least eight Gap Filler or Greening the Rubble initiatives in earthquake-affected areas of the city in the coming year.

This grant will come from the Civic and Community Project portion of the Capital Endowment Fund and had no impact on the rates increase.

The Council also requested a number of staff reports on specific projects in response to feedback received from the community.

Christchurch Mayor Bob Parker said the city had been through a lot in past months, but the support of the community and help from around the country had enabled it to survive.

"I would like to thank the people of New Zealand who are contributing to our rebuild and I acknowledge that we also must pay our way. I can honestly say that this Council has worked hard to minimise the rates increase, while ensuring we can move our city forward.

"While most of the $2.5 billion of damage to city infrastructure caused by the quake will be covered by insurance and Government subsidies, the city will still be faced with significant costs and this will affect our budget. The exact cost is still to be determined as negotiations with insurers and Government continue.

"This, combined with significant revenue loss as a result of the earthquake, adds up to a forecast deficit of $27.2 million for the current financial year (and a total of $73.8 million over the next three years).

"It is unusual for the Council to face a deficit - over the past four years we have recorded surpluses of $23.7 million - but we are in extraordinary times and this is the most prudent way for the city to cover the costs of the earthquake.

"The additional rate of 1.76 per cent adopted today, over and above the 5.34 per cent increase, will help pay for these unbudgeted costs so that we can carry on with the rebuilding of our city."

Mr Parker said the feedback process, although shorter than usual, resulted in a number of worthwhile additions and changes to the draft plan that will benefit the city.

- HERALD ONLINE