Our financial position

Despite over $5 million in emergency spending since the November earthquake, we are in good financial shape.

The Council’s finances are sound, which means rates this year – despite the increased focus on resilience following the earthquake – will rise 3.3 percent, not the 5.1 percent forecast in the Long-term Plan 2015–25.

We’ve managed to do this by identifying $11 million of lower priority spending. Service levels won’t be affected; instead we will focus spending on where it can do the most good.

We are also carrying less debt; $80 million less than we forecast. This means we pay less interest, we can borrow more if we need to address fresh challenges or make new investments, and our credit rating remains strong.

Changes to budgets

The changed priorities, re-phasing of capital expenditure, cost savings and efficiencies have been incorporated into the proposed budget for 2017/18. The changes to the budget are:

Long-term Plan
Proposed for the Annual
Plan 2017/18
Operating expenditure
$473.5 million
$475.4 million
Capital expenditure
$206.3 million
$161.5 million
Average rates increase after growth
Forecast year-end borrowings
$570.2 million
$537.4 million
Debt over operating income  124.4%  116.5% (the Council’s debt limit is 175%)

Capital projects – key changes for 2017/18

Re-phased spending
What’s changed
Movie museum
Final designs are under way with partners, and won’t require funding in 2017/18. The project will not require capital funding for 2017/18.
Convention centre
Civic campus property
Improvements are awaiting remediation reports. No capital funding for 2017/18.
Town Hall earthquake strengthening
We are currently negotiating and consulting on establishing a music hub. The majority of earthquake-strengthening works are to start in 2018/19.
Museum of conflict
Resilience projects have taken priority. Deferred until 2018/19.
Johnsonville Library upgrade
Changes in the scope of the upgrade to ensure the community benefits means delivery will occur outside 2017/18. The impact will be included in the Long-term Plan 2018–28..
Northern growth roading projects
The timing of NZTA work has changed. No Council funding will be required in 2017/18.
Cycling improvements
Stronger community engagement has meant a re-phasing of the programme.
Kumutoto public space and Frank Kitts Park
Frank Kitts Park planning continues into 2017/18, meaning re-phasing to 2018/19.
Social housing renewals $2,700
The renewal programme for the Arlington site will now be part of the overall redevelopment programme.
Focus on resilience has meant re-phasing of some renewal and minor work projects.
Total  $134.6 million

Impact on rates

For 2017/18, after allowing for expected growth in capital value less capital expenditure, lower costs and improved efficiency, the Council is able to reduce the Long-Term Plan rates increase from an average of 5.1 percent to 3.3 percent.

For individual ratepayers, the rates on an average residential property (valued at $579,304) are forecast to increase to $2,430 (excluding GST). For commercial properties, after including the impact of 2017/18 increases in metered water charges, forecast average rates will increase by 3.1 percent.

Supporting documents

These documents provide detailed information about the impact of the proposed changes on the Long-term Plan 2015–25 and how these changes will influence the Council’s overall financial position.