Chch rates to rise 14%: lowest for eight years

Press, 19 May 1982, Page 1

Chch rates to rise 14%: lowest for eight years

Christchurch City Council rates will rise by 14.62 per cent this year, the lowest increase in eight years and below the inflation rate.

Because the council also collects rates for ad hoc local authorities, such as the Transport Board and Drainage Board, the total rates bill for city residents could be up by 15.35 per cent. The council made its first move last evening toward a new way of reducing its dependence on rates in the long term by increasing its income from property rentals.

The $152,681 to be received from a Ministry of Transport back payment for drivers’ licences will be used to start a property purchase fund. Cr Vicki Buck, the policy and finance committee chairman, introduced the strategy. Details will be worked out by a project team later this year.

Land bought under the scheme would be held under a form of title which made it incapable of being disposed of readily. Cr Buck said she hoped that it would be possible to invest at least the same amount of money in the fund each year. It might be desirable to reinvest rental income during the fund's first years, she said.

The council had to be prepared to look at some of its trading activities, and to promote empowering legislation that would make it possible to earn more revenue, she said. Christchurch did not have a diversified financial base in areas other than rating while the. Wellington City Council owned large areas of reclaimed land and the Dunedin City Council had endowment land. Both were good sources of revenue.. In Christchurch, the rental of land and buildings would become increasingly important: “This council will get no immediate benefit from this policy,” Cr Buck said, “but in years to come there will be enormous benefit.” Cr Buck said that present estimates owed a great deal to zero-based budgeting, even though the council had not fully achieved that goal.

In the future, there would be more ranking of spending priorities. “One of the most exciting things about managing with less is that it means all traditional thinking has to be challenged," she said. Cr M. J. Glubb said he was “strangely intrigued” bv the

Labour-dominated council’s ideas on making more money, since it seemed to be a capitalistic move at odds with the Labour Party’s philosophy. He said that such investments in property would be beneficial only if they ended in capital gains. Investment money might be better used to help fund capital works projects needed now. “When one becomes policy and finance committee chairman of this council, philosophies do tend to go out the window, and pragmatism does come in by the door,” said Cr Buck.

The Mayor, Mr Hamish Hay — a member of the budget sub-committee which lopped $1,111,650 off spending proposals — said , the rate increase could have been 18.6 per cent if the council had not been so fortunate in an increased carry-forward of $BBl,OOO over the previous year.

That unexpected increase, largely from investment interest on short-term deposits, allowed the rate rise to remain below the inflation rate.

Mr Hay's only basic difference of opinion with Labour members of the sub-commit-tee had been the rubbish recycling scheme. He thought that spending there of more than $500,000 could have been better spent on road and footpath maintenance. The expensive scheme's “day of reckoning” might be next year, he said, when the council did not have a carryforward surplus of $1.4 million and a local body election was only a few months away. Mr Hay said it was time to consider whether a strong metropolitan council could result in substantial cost savings in local government activities. “Unless some specific examples of possible savings and benefits can be spelled out, we will make no real progress” in restructuring proposals, he said, “as the day of mefely making general statements inadequately backed up by hard facts, has passed.” Cr Buck said the budget “reflects the harsh reality of limited resources. We can see the writing on the wall. There will be less money for local government.” The council had to be

prepared to try new ways of doing things. Cr . Helen ■ Garrett said there had been "ruthless cuts” in roading and parks spending, two fundamental areas of council activity. Roading could not be maintained in the long run with the level of spending that had been approved, and there could be a falling-off in standards of parks services. It had also been wrong to cut out all community grants from rates money for the second year in a row. “It seems to me a harsh and short-sighted measure,” said Cr Garrett. At the same time, Labour councillors insisted on “indulging in a spectacular spending spree” with the rubbish recycling scheme. Reconstruction of the Sumner lifeboat slipway was ensured with provision of $lOO,OOO in this year’s budget. • The construction timetable is still an open question, since half of that amount is to come from other local body grants and a Government community facilities fund subsidy.

If that $50,000 could not be raised, the issue would return to the council, said Cr Buck. Cr D. C. Close moved that $200,000 in the street construction estimates should be restored. He did not expect that amendment to be adopted, but said that the principle of providing enough money should be emphasised. Cr Rex Lester said that tactic was a good one. Cr Close would be assured of support next year, he said: “It alerts the council, and puts up a red flag. It is an alert we must take notice of." Cr Glubb’s move to dump the $580,000 recycling scheme was defeated.

"I don't deny there is a lot of work to be done on the scheme,” said Cr Close. He was confident that savings could be made during the year, and “strenuous efforts” were being made to find markets for ■ collected materials. Cr Garrett tried to have $55,000 restored for replacement of the house at Victoria Park, and $12,500 for the council’s half-share of the Mona Vale bathhouse conversion completion. Both moves were defeated. Council budget, P 6