Mayor Dan Gordon opened the workshop saying the Council were in alignment with the direction from the Central Government to focus on good quality local infrastructure, core services, and rates restraint.

The Draft Annual Plan takes place in Year 2 of the recently adopted Long Term Plan (LTP) which had rates for the coming year increasing at a proposed 4.8%.

“I am committed to seeing us deliver what we said we would through the LTP and this workshop is an opportunity to discuss and further investigate ways we can get better value for money and deliver the services the community wants,” said Mayor Gordon.

Chief Executive Jeff Millward outlined the economic situation facing both the community and Council.

“As expected there are no significant changes since last year and staff have been instructed to review their programmes to see if we can get better value for money so services can be kept consistent,” said Millward.

“The community is still facing cost-of-living pressure – the consumer price index has been running high for the past year and mortgage rates, while dropping, remain high.

“The same cost pressures facing households are also affecting the Council and this is what is driving cost pressures on Council budgets for the coming year which will make it a challenge to stay near the 4.8% signalled.”

These pressures include:

• Asset values (roads, reserves, water plants etc) have increased which increases the costs of depreciation (money put aside for asset maintenance and replacement)
• A number of costs such as electricity and insurance costs have skyrocketed
• There has also been a drop in the Government share of roading infrastructure. Lower than anticipated NZ Transport Agency Funding left the Council with a $13.5m gap.

The Council also discussed their finances at a high level.

Revenue sits at approximately $150m per year, with debt around $200m. This is a 1.3: 1 debt to income ratio and well under the Government threshold for a growth council. This is also backed up by community-owned assets (roads, reserves, water plants etc) valued at approximately $200b.

For a household comparison, mortgage borrowing in New Zealand is capped at a 6:1 debt to income ratio (for owner occupiers), many of whom have their home as their major asset. This common debt ratio is 2.4 times higher than Council’s self-imposed limit and 4.5 times higher than Council’s debt currently.

Council's financials are also audited annually by Audit NZ and Credit rating agency Standard and Poor's has recently reconfirmed its AA long-term and A-1+ short-term credit rating with a stable outlook for the Council. For comparison, New Zealand retail banks ANZ and BNZ both have a Standard & Poor's Rating of AA-.

“The upcoming Annual Plan recognises expected changes to the Local Government Act which prioritises good quality local infrastructure and core services and well as legislation to bring in things such as revenue capping to noncore activities,” says Mayor Gordon.

“Our Council is a financially prudent one and our finances show this. We’ve had the lowest rates increases in the Greater Christchurch area for many years now and shown restraint throughout Covid-19 and in the years since, and we’ve achieved this by considering the impact on the community first and foremost. We’ve also done this without compromising our position as a high-growth Council that’s attractive to move to, and our residents are happy with the services the Council offers.

“To stay near our signalled increase of 4.8% all items are open to be investigated.”

Budget meetings, where Councillors go line-by-line through each activity, take place in late January. The Draft Annual Plan will be open for public comment in March 2025.