Super-city costs jump by $26m

Consultants admitted data errors about the cost of merging all nine councils into a Wellington super-city and have revised figures to $210 million, rather than $184 million.

The estimated cost of creating a Wellington super-city council has jumped up by $26 million.

Consultants admitted mistakes in the data provided to the Local Government Commission, which has now revised the cost of merging all nine councils at $210 million, rather than $184 million.

In a press release, the commission said the increase was related solely to estimating the costs of integrating all the councils' IT systems and infrastructure.

The costs of merging the IT systems is now expected to be $127.5 million.

It said it had been advised there were significant challenges in accurately estimating these costs and had received an apology from the consultants.

Transitioning to the super council would be spread over four to five years, with a payback period of nine years, rather than eight years as previously stated.

A commission spokeswoman said the transition costs would be shared by the existing councils until the proposed super-city council was formed.

Once set up, the new council would decide how to fund the rest of the transition costs, whether by a loan and/or through rates.

It would also have to decide a new rating system which would come into force in July 2019, with rates based on capital value, not land value. The current rating systems would remain in place until the new system was created.

The $210 million may not be spread equally over each year but the draft proposal estimates the initial start-up costs at $10.3 million.

The first elections for the new council would happen in October 2016.

Commission chairman Basil Morrison said he was disappointed to learn of the revisions but was satisfied the external consultants had moved swiftly to acknowledge and remedy their errors.

"The revision to the table [in the proposal] does not change the commission's preferred option.

"The commission has taken a long-term view about the council structure that will best serve the region over the next 30 years. The costs and benefits - both financial and non-financial - are viewed over that timeframe."

Mr Morrison encouraged people to make a submission before the March 2 deadline.

As of February 12, around 400 submissions had been received.

Submissions can be sent to: submissions@lgc.govt.nz or posted to: Local Government Commission, PO Box 5362, Wellington 6145.