The Christchurch City Council is seeking public feedback on its proposed 10 year plan for Council revenue and spending. This is probably one of the most significant 10 year plans ever to be written by a local council because of the sell down of Council assets it proposes and the impacts of the Council’s decisions on the city’s rebuild and recovery.
Council finances are at the heart of the proposals. The Council says it has to find $1.2 billion to bridge the gap between revenue and spending. It proposes selling $750 million of shares in council owned companies such as Orion, Christchurch International Airport, and Lyttelton Port Company.
These companies have generated substantial dividend revenue for the Council over the years ($52 million last year), which have helped keep Christchurch rates low. Yes the funding shortfall is a major issue but selling down our revenue generating assets is not the solution, especially given the levels of uncertainty about the Council’s insurance payouts. There is another way.
The cost sharing agreement is the elephant in the room here. The Council proposes rates increases and asset sales to raise revenue when a real solution would be to renegotiate the cost sharing agreement with the Crown to axe, downsize or defer some of the “anchor projects” such as the stadium and the over-sized convention centre.
Mayor Lianne Dalziel says there are “no nice to haves” in the 10 year plan; yet it still provides for spending on the stadium. For the Green Party, the stadium is clearly a “nice to have.” Its inclusion in the long term plan raises serious questions about the Council’s priorities.
The cost sharing agreement which the previous City Council signed with the Crown effectively binds both the Council and the Crown to set contributions to the “anchor” projects. It provides for Council to spend $253 million on the new stadium, with another $37 million from the Crown. The Crown proposes to spend $285 million (with costs already predicted to exceed this) on the convention centre. Deferring or scaling back these two projects alone would release hundreds of millions of dollars to help rebuild basic suburban infrastructure and avoid the sell down of Council companies.
The Government and the Council must re- examine the cost sharing agreement with a view to renegotiating it to reflect the city’s needs and to support the rebuild in a realistic way. CERA’s anchor projects are gold plated projects which benefit the central city and the construction industry. They don’t help meet real community and suburban needs for more effective public transport, rebuilt community facilities, functioning roads, stormwater and sewage infrastructure.
Council also needs to look much more closely at its spending plans and scale back or defer some of its capital spending, especially on central city roading projects. The biggest chunk (16 percent) of the Council’s proposed spending over the next 10 years is on roading. There is scope for savings here.
In the absence of an outcry from our elected councillors, it is up to the public to submit on the 10 year plan and call for a rethink on asset sales, a reassessment of the cost sharing agreement, and real focus on where council can make savings.