Rate increases:
Remember how Phil was promoting 4% rates increases during the election campaign? Last week we analysed how much costs CCC is facing that have gone up over which they have little control, and that it would be nigh on impossible to get to that figure. So, let us consider how rates could fall with city wide revaluation and just how much the potential rate increases might be. And how much the CCC executive are hiding behind a secrecy screen. Then I will cover the issue of the government appointing a mediator to investigate the stand-off between CCC and central government on 3 story housing.
The impact for ratepayers on the revaluation on property.
Every few years every property in the city is revalued.
The mayor and councillors set how much is needed for CCC to function over the next year with both operating and capital expenditure. That supplies a total figure against which the valuations are applied.
Let us take a suburb like Linwood. Not so long ago I was sending prospective homeowners in the direction of this suburb. It was possible to get a good do-upper home ideal for first home buyers. Houses that with lots of effort would be great to live in. Over the last few years these houses have nearly doubled.
So, if a house was $350K in the last valuation and now is $700K then the share of this property towards the council income has doubled. It doesn’t mean the rates will double but they will go up considerably. If the city has gone up proportionately the same, then nothing will happen to the house in Linwood with the rating level. However, if the increase differs from suburb to suburb, then this can be a very big hit in an area which might house those on low incomes.
I have tried to obtain the impact of revaluations on various suburbs, and it has not been supplied. The council has the calculations already.
The rate increases next year of 14.6% that the elected reps struggling with:
We nominally stay in the dark over our rates increase, whilst in Auckland the Council has informed the public that they are struggling with 13%. Here’s the article
Our council has not informed us that it is struggling with 14.6%. We had to find that out through leaks.
The councillors had been briefed on what the rate increase was at the start of the budgeting process. So, this week I asked:
I would be grateful if you could supply me with the following papers:
- Any briefing papers/presentations for elected reps on potential rate increases before any adjustments are considered.
- The impact of revaluations on Christchurch for both residential and commercial.
- The impact of potential rate increases on the revalued areas of the city.
I received this reply:
Staff will treat this as a LGOIMA. In the meantime, I have provided the following information to other media previously (a couple of weeks ago).
1. Here is the response from Leah Scales, General Manager Resources/Chief Financial Officer:
Every year we will give a series of briefings to Councillors in regard to the annual plan as we lead up to adoption of a draft annual plan in February prior to consultation. The first of those briefings was last week. This briefing also was an introduction to the process for the new Councillors.
Our first briefing takes the start point (LTP/AP23) and adjusts for uncontrollable changes, ie inflation, interest rate rises, and updated forecasts relating to the delivery of our capital programme which will impact the starting point for the FY24 annual plan.
We have not given a current estimate of what the rates rise will be, this will not be until later briefings. What we have done at this initial stage is provided an indicative range without any mitigations. This was in essence a risk check for the Council to show the potential impact of these external factors on our operations. The Council is no different to any other business that is currently being impacted by inflation, labour shortages, supply chain challenges and interest rate rises.
Like all businesses in the early stages of budget planning, we are currently assessing all options that can help reduce the impact of these external impacts on our operations, one of these things will include a clearer view on our growth numbers that we won’t have clarity on till closer to adoption date, this is no different from past years. We will continue to balance the need for us to deliver our services with the impact on our ratepayers, as we are fully aware they too are dealing with rising costs.
Releasing any further detail at this stage would be misleading to our ratepayers. As part of the annual plan process we are anticipating briefings in public as we have done in the past and formal consultation. It will be at this stage that we will be able to share more information, with clearer indications of the potential rate increases and mitigation options.
So, I replied:
With the greatest of respect to my professional colleague, Leah Scales, her response reflects a “leave it to us we know what we are doing” attitude. I understand the complexity of the challenge. However, by treating this as a LGOIMA query it’s just delaying the inevitable. At the end of 20 days she will say she still can’t give information and it will be delayed again.
The sentence which states “We have not given a current estimate of what the rates rise will be,” is rubbish because the number given to the councillors is well known on the streets. Leah’s cranky email to elected reps telling them to shut up about the numbers is at best attempting to consolidate a power base and at worst offensive.
This reluctance to engage with the public is precisely what concerns the Ombudsman. I might write a note to him and seek an opinion from him on this sort of nonsense.
Secret meetings is precisely what brings CCC into disrepute. Secret deliberations compound this. Open up the windows and let some fresh air in.
If you have given numbers to elected reps and you have produced documents then let the public know what they are. Then we might all be able to assist with what will be a very challenging exercise. Send them to me now. I’ll get in behind CCC and see how we can help.
I still have not heard back from the CCC executive.
The government’s appointment of a mediator:
I was impressed that Phil Twyford had appointed John Hardie as a mediator between the government’s imposition of the entitlement of developers to build 3 stories as of right and CCC’s saying “get stuffed”.
The Minister could have dumped on CCC with all the power which parliament has given him. Instead, he didn’t and for that I applaud him. He appointed John Hardie who is a superb mediator with a well-deserved reputation of finding solutions to problematic challenges. That’s why mediators exist.
I totally support what CCC decided last term. I am sure that John Hardie will find a solution as there are parts of Christchurch where intensification up to 3 stories would be fine. It should not be able to happen everywhere, however.
There has been media commentary that resident’s groups wish to meet with John Hardie. I think that is unnecessary. These groups pressured the elected reps last term of council which is a big reason why the council made the decision they did. They should write a submission for John Hardie to consider.
In the Stuff report in this article Phil Mauger is reported as saying:
There was some talk of speaking to residents’ groups, (in the meeting with John Hardie) but he could not remember what the end result was.
He said he believed there should be some form of public participation but did not want widespread community consultation.
“If you open it up, the next thing you’ve got 300 residents coming forward to you. You would be an old man before you ever got anything finished. You have to be realistic,” Mauger said.
That, again, demonstrates that Phil does not understand process. John Hardie has been appointed to find a solution between where the government and CCC sit on the issue of 3 story units. The community have spoken. It’s now the task of CCC as an institution to challenge the government. Public consultation has occurred. Now it’s the test of Phil Mauger as mayor and Dawn Baxendale as CEO to find a workable solution.
Kia ora Garry
As a resident of Linwood, I’d like to elaborate on those valuation increases we’re experiencing. They are entirely led by developers buying up older properties on full sections and building multiple townhouses on them. In my street alone, between Linwood Ave and Woodham Rd, by the end of next year there will be 44 more households than there were at the beginning of this year. And actually, they will be in just half the street – the Linwood Ave end. The Woodham Rd end has (so far) not had any townhouse developments.
I don’t have a problem with that – we need more housing, and most of these developments are pretty nice, actually. Some of them are even single-storey!
But getting back to the issue of valuation – now every home in this part of Linwood is valued as if it were available to a developer wanting to bowl it and erect multiple units. For some this is just unrealistic – there are many properties along this street which already have been subdivided from their original large sections, and so are unattractive to developers. So yes, that increasing valuation will hit individual property owners to some extent.
Not complaining, just wanting to point out why that’s happening here.
Good point Ashley – might be worth asking Yani to follow up on that
Are you telling a story or are you talking about the number of storeys that can be built. Must have been the catholic education!
Thanks fellow pedant
Mea culpa
Garry