Christchurch City Council ratepayers face an overall rate increase of 2.39 per cent for the coming year.

This figure was released in the Council’s draft annual plan today and the chairman of the Council’s Strategy and Resources Committee, Cr. David Close, said that the figure was slightly lower than the 2.47 per cent predicted in last year’s plan.

“As a result of the funding policy, which allocates costs to different rating sectors, the residential rate increase is marginally higher at 2.56 per cent. For the median residential property ($142,000) the increase is 37 cents a week, he said. For a residential property at the upper end of the market ($400,000) the increase is $1.02 a week.

“The commercial-industrial rate increase is lower at 0.17 per cent. Rural ratepayers face an increase of 11.7 per cent,” he said.

Cr. Close hoped that rural ratepayers would remember they had a rate decrease last year.

He said the draft annual plan departed from the provisional decision of the Council to allocate $75 million to the debt repayment reserve.

Allocating the larger sum ($100) to the debt repayment reserve gave ratepayers a more immediate benefit, he said.

“It can, in effect, pay for the capital costs of both the art gallery and the wastewater treatment upgrade,” he said.

The Council’s financial strength was consolidated by the creation of an endowment fund with initial capital of $75 million, he said.

“Given the return of capital funds from Orion and the savings made from the efficiency review, some ratepayers will ask, quite understandably, why there need be any rate increase at all in the next few years.

“There are several reasons. The first is that inflation…was at 4.1 per cent in the December 2000 quarter…The second reason for rate increases in coming years is that the major capital projects (art gallery, new landfill, wastewater plant, libraries, pools, bus interchange) will increase annual operating expenditure by several millions dollars a year,” he said.

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