Thisiswhy rates may rise – Dalziel

Christchurch rates could rise by an average of 5.5 per cent this coming financial year, despite the city council spending nearly $160 million less than planned on capital projects.

The council released the 2017-18 draft annual plan yesterday. It will be finalised in late June after public submissions.

The council’s Long-Term Plan (LTP), a 10-year plan covering 2015 to 2025, had forecast a rates increase of 5 per cent for the year starting July 1, 2017.

Mayor Lianne Dalziel said yesterday that while the proposed increase was slightly higher than forecast, it reflected the amount of work the council was undertaking.

‘‘Of the nearly half a billion dollars we’re proposing to invest in Christchurch next year, $270m of that funding is already committed to major projects coming to fruition across facilities, water and transport,’’ she said in a statement.

Dalziel said there would usually be less than $50m committed in a financial year, so the current commitment gave ‘‘a sense of the sheer number and scale of the projects under way around the city’’.

Planned spending on several key projects has been deferred to the 2018-19 financial year. The draft plan says total capital project investment is set to be $480.2m in 2017-18 – down $159.8m from what was expected in the LTP.

Dalziel said keeping the average rates increase as low as possible was ‘‘a major priority’’. ‘‘It’s vital we strike the best balance between affordability for ratepayers and the timely delivery of the city’s projects, and I think we have achieved that.’’

The council is also set to borrow an unplanned $60m to bridge a shortfall in expected ‘‘capital release’’ from Christchurch City Holdings Limited (CCHL). This is because CCHL, the council’s investment arm, is no longer selling City Care and other businesses it owns, creating a $120m shortfall that will be split over two years.

Despite this, total planned borrowing is down $119.6m overall compared with the LTP, due to delays in funding for capital projects over the next three to five years.

Projects with delayed funding include $24.9m for the Sumner-to-Lyttelton road corridor, $18.5m for the metro sports facility, $10.3m for the performing arts precinct and $14.1m for the Christchurch wastewater treatment plant earthquake repairs.

Dalziel said the council was spending money only when it needed to in a project’s timeline, which allowed them to prioritise more urgent repairs and rebuilds.

‘‘That doesn’t mean we’re doing any less, or that there will be delays to essential projects. It simply means some spending on long-term projects will happen in future years.’’

Finance and commercial general manager Carol Bellette confirmed the review of the capital programme did not include delaying projects. ‘‘The timing of a number of projects has been rephrased over the next three and a half years. However, the completion dates of essential projects remain the same.’’

Public submissions on the draft can be made from March 20 to April 28.