Call to rethink contracts
Slashing contractor costs could spare the Christchurch City Council from rates hikes or service cuts as it wrestles with its annual budget, a prominent developer says.
Dozens of business leaders, community groups and individual ratepayers have submitted to the annual plan, being heard this week by councillors.
Labour MP Duncan Webb blasted the council yesterday for proposing to cut its capital programme by
$168 million, and increase rates by just 3.5 per cent instead of the 4.65 per cent, proposed before the Covid19 crisis.
He accused city leaders of supporting a ‘‘1980s-style austerity’’ budget that will cost thousands of jobs and damage the city for years to come.
However, Richard Peebles, whose central city projects include the Riverside food market, Little High and the Guthrey Centre, will tell councillors today they can avoid both rates rises and service cuts by asking contractors to reprice their deals with the council.
‘‘On all our projects at the moment, we are going back to all our suppliers – from plumbers to architects and engineers and lawyers – and asking them to requote for all of their work,’’ he said.
‘‘We are making 10 to 20 per cent savings on that. That is what the council should be doing.’’
Contractors were quoting lower prices because the post-Covid economy was slower and so competition was higher for jobs, Peebles said.
It was an ‘‘awesome time’’ for the council to work on capital projects, he said.
‘‘They haven’t grasped that the economy is different, and they could get more for less.’’
Webb, the MP for Central Christchurch, said rates increases caused hardship for some, but not all.
‘‘So let’s not give everyone a free ride at this time of crisis. Let’s make sure our assistance is targeted to those who need it.’’
The council has made sweeping changes to its budget to keep a planned rates rise as low as possible, despite a $90m financial hole left by the Covid-19 crisis.
It was proposing to cap the capital programme at $400m during the 2020/21 financial year and the council has set aside $117m on top of that for the metro sports facility and the stadium.
The council has deferred $168.2m of works to later years.
Among scores of projects facing delayed spending are the Hornby library and leisure centre ($3.9m),
$6.8m for the performing arts precinct – though $1.5m for decontamination work will go ahead – the Old Municipal Chambers and Robert McDougall Gallery, and $4.5m for the Akaroa wharf renewal. Road and footpath improvements of $21.6m could also be put back, along with almost $25m of funding for cycleways.
Bins in central Christchurch could be emptied just four times a week if cuts to budgets go ahead. Other projects, including safety improvements at Dyers Pass, road smoothing and remediation of the Bexley landfill have been added.
Webb said cutting the capital programme was a ‘‘real dagger to the heart of Christchurch’’, especially when the Government had set aside billions of dollars to support employment and its people throughout the country.
Councillor Sam Macdonald, who has been advocating for a 0 per cent rates increase, pushed back by asking Webb where the Government was at with deciding on which projects would receive money as part of its shovelready programme to kickstart the country’s economy.
The council has submitted $818m worth of projects for government support, including for flood protection along the Avon River corridor, cash for cycleways and money towards drinking water safety improvements.
Webb said he did not hold the pen on applications to Treasury.
‘‘I am flabbergasted that council proposes to cut its own capital programme and then stick its hand out to Government to give it more funds to make up the shortfall.’’
Christchurch mayor Lianne Dalziel asked Webb if he had ‘‘worked through the reality’’ that city councils could only gather their income from the capital value of people’s properties, yet Government had the advantage of more income streams.
‘‘It’s a completely different environment for local government,’’ she said.
‘‘If we cannot physically do more than $400m worth of capital programmes, there is no point putting more money on the budget.’’
Also speaking to the council yesterday, Canterbury Employers’ Chamber of Commerce chief executive Leeann Watson said the chamber supported the council’s proposed 3.5 per cent rates increase and believed a zero increase would have affected services and key capital projects the council could deliver.
‘‘I am flabbergasted that council proposes to cut its own capital programme and then stick its hand out to Government ... to make up the shortfall.’’
Labour MP Duncan Webb