The Christchurch City Council has announced its annual plan with a proposal to increase rates this year by a combined 7.08% this year, partly because of extra costs linked to the February 22 earthquake that devastated the city.
"The earthquake dramatically affected the normal Annual Plan process causing a complete revision of budgets, capital projects scheduling and levels of service," the City Council said in a release on Friday evening.
"Because of the earthquake the Council is facing budget deficits of NZ$73.8 million over the next three years and is proposing an additional rate of 1.76% to pay for this, over and above the 5.32% rate increase indicated before 22 February," the Council said.
Christchurch Mayor Bob Parker said most of the NZ$2.5 billion of damage to city infrastructure caused by the quake will be covered by insurance and Government subsidies but the council would still be faced with significant costs.
"These are unbudgeted costs and they will impact on our activities, our major projects and our finances. In addition, we are faced with a significant loss in revenue as a direct result of the earthquake including: loss of dividends from Council-owned companies of NZ$14 million, loss of parking revenue of NZ$6.9 million and loss of income from sports facilities," Parker said.
"All of this adds up to a forecast deficit of NZ$27.2 million for the current financial year (and a total of NZ$73.8 million over the next three years). It is unusual for the Council to face a deficit - over the past four years we have recorded surpluses of NZ$23.7 million - but we are in extraordinary times and this is the most prudent way for the City to cover the costs of the earthquake."
The council proposed the deficit be paid off over five years through an additional 1.76% on rates for five years, over and above the 5.32% increase forecast for 2011/12 prior to the February earthquake.