Planning Our Budget

14 March 2011

The difficult economic times are reflected in the budget our Strategy and Policy Committee has put forward.

Swimmers enjoying a Council pool

Swimmers enjoying a Council pool

Councillors have agreed to consult the public on a range of proposed savings and spending measures that, if approved, will result in an overall average real rates increase of 4.3 percent for the 2011/12 financial year.

The proposed increase has been kept as low as possible despite significant budget pressures such as a slower-than-expected economic recovery, the $88m leaky homes liability and higher-than-forecast inflation especially petroleum-based products. Other factors are interest and depreciation costs on our assets, the potential economic impact of the Canterbury earthquake and the possibility of a double-dip recession.

The committee's recommendations are part of our Draft Annual Plan process. The plan outlines our work programme for the year, details what it will cost and any rate and fee increases. Recommendations agreed last week will be debated and finalised at a Council meeting on 24 March. You are invited to submit your views on the proposals from 11 April to 12 May. The Council will adopt its final position on 29 June.

This year we take the final step in honouring a commitment made 10 years ago to bring down the general rates differential from 7.1:1 to 2.8:1 - the difference in the rates share shouldered by commercial and residential ratepayers.

Mayor Celia Wade-Brown says difficult economic times mean the Annual Plan will find a balance between affordability for ratepayers, good decisions about the city's future and maintaining the wide range of services that the Council provides .

"This is not the year for grand new initiatives," says Mayor Wade-Brown. "The reality is that we have had to make some tough decisions and rates will need to increase to cover the likes of the Council's leaky homes liability and the cost of delivering services, but I am very keen to hear what the public has to say about what we have put forward.

"Given the tragic event in Christchurch, I do believe it is important that we continue to invest in critical infrastructure such as the new earthquake-resistant water reservoirs. We also need to push on with upgrading our network of water pipes with more resilient materials, to ensure the city is better prepared to cope with and recover from a significant seismic event."

Despite the austerity measures, we still propose to invest $152 million in new capital projects that include $45 million on community housing, upgrades and new houses and $36 million on roads, footpaths and cycleways.

A total of $22 million has been set aside for critical infrastructure to the city's water, stormwater and wastewater network, which involve the building of new earthquake-resistant reservoirs in Karori and Prince of Wales Park. Old water pipes will continue to be replaced with earthquake-resistant materials under a programme begun 15 years ago. A further $6 million will be invested in new or replacement swimming pools.

Councillors have also proposed a $650,000 feasibility study on the construction and design of a new $18-million dollar deep-water swimming pool complex, on the site of the existing regional aquatic centre.

Some of the proposed reductions in services include a $105,000 saving by reducing operating hours at the Central Library - rather than closing at 8.30pm on week days the library would close at 7.00pm - plus closing an information desk and providing international newspapers in digital format only.