Friday, 26 June, 2015

Long Term Plan sets city up for the future

Christchurch City Council today adopted a Long Term Plan that will set the city up for the future by spending $9.9 billion over the next 10 years.

Mayor Lianne Dalziel says the Plan allows the Council to retain strategic assets – the airport, port and power company Orion – and also reduce proposed rates increases.

“We’ve got our finances in order and proved we have the capacity to deal with any shortfall. We have not assumed any more government funding, but we will continue talking to the Crown about further contributing to rebuild costs, especially for land drainage.

“During public consultation on the Plan many people told us that selling off core infrastructure assets was unacceptable. But they clearly felt there was a big difference between power company Orion and car park buildings - one is owned for strategic reasons, and the others are not. We’ve listened to that feedback.

“By cutting our spending we can take a less aggressive approach to releasing capital from our commercial arm Christchurch City Holdings Ltd, and spreading any capital release over three years gives us more options.

Orion, Lyttelton Port Company, Christchurch International Airport, EcoCentral, the Council’s shareholding in Vbase Ltd and the Town Hall remain on the Council’s list of strategic assets. Mayor Dalziel says any sale of shares would therefore require further public consultation.

Red Bus, City Care and Enable Services have been removed from the Council’s list of strategic assets so they can be sold in whole or in part without further public consultation. However Mayor Dalziel says that selling shares in Council-owned companies is not the only way of releasing capital.

“We could restructure companies so they increase debt or issue preference shares to pay us a larger dividend. We will explore that when we have received expert financial advice on options for handling the capital release.”

Under the Long Term Plan rates will rise by 7.98 per cent this year, then 7.18 per cent, 6.98 per cent, and 5.74 per cent in each of the following years. This year’s rates rise includes an earthquake levy of 1.93 per cent, and subsequent years include an infrastructure levy of 1.5 per cent which the Council has signalled will be needed until 2025.

Mayor Dalziel says the Council tried hard to minimise rates rises, and will continue to work to reduce the level of rates increases as part of the annual plan process.

“We’re conscious of the large number of residents on fixed incomes and the need to keep rate rises down as much as possible.”

Mayor Dalziel says the newly adopted Long Term Plan will be fine-tuned in successive annual plans. “We getting an independent review of the capital work programme and the eventual size of our insurance payments will also have an impact. This is a starting point as we prepare to assume leadership of the city’s long term recovery and regeneration.”

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