Palmerston North City Council debt rose from $215 million to $261 million
Palmerston North City Council debt interest costs have increased by more than 70% in the past 2 years
Annual report shows Palmerston North City Council borrowed $47.6 million, having budgeted for $36.1 million
- Karen Naylor is a Palmerston North City councillor
OPINION
This week at our council meeting we will be confirming our last year’s Annual Report. This sums up the highlights of the past year, and outlines how we tracked against our planned budget.
Three facts are: our debt grew from $215 million to $261m, debt per rateable property increased by 23.6%, and $91m of capital works were completed.
Council identified the capital programme delivery as a key focus for staff, and they can be congratulated, as they delivered more than ever before. This cost $91m and included investment in water and transport infrastructure, social housing, animal shelter, upgrades to playgrounds and property purchases.
This year we borrowed more money than budgeted - something I’m not comfortable with. We borrowed $47.6m, compared with the budgeted $36.1m. The planned capital programme was already significant and council added to this throughout the year by approving $12.3m of additional expense.
Our growing debt and the cost of servicing this debt has already increased significantly, and this contributes to rates increases this year, and in the coming year. Council debt interest costs have increased by more than 70% in the past two years.
We’ve heard a strong message from our community asking us to live within our means, to focus on essential work and defer non-essential projects. I believe our planned expenditure is unsustainable. I’m concerned about the impact on ratepayers in the coming years and on the next generation. Whilst I believe debt is an acceptable way to fund essential work, the level of increase and the level of non-essential work being included is of real concern to me.
I’ve been suggesting that we operate within our budget and I believe that we need to be taking a more prudent approach. Inevitably things can change during the year. In our households, if unexpected costs arise, generally we have to reprioritise and adjust spending in other areas to accommodate urgent or unplanned expenses.
I believe the same should be the case for us at council and that we should reprioritise rather than simply adding new costs to our budget. I have been urging my colleagues to consider this when making funding decisions.
Last week we visited the airport to have a tour and hear about the $40m new terminal development plans. This is funded via airport debt so has an indirect impact to ratepayers due to loss of dividend in recent years and will mean lower return to ratepayers in the coming years.
Palmerston North Airport.
This contributes to rate increases, as the loss of this income has to be made up through rates. On the positive side though, this will mean an improved experience for those travelling.
On a different note, last week at our community committee we heard from our disability reference group about the work they are doing to ensure our council services are accessible and appropriate for our disability community.
They outlined concerns about changes to support services due to funding changes which have negatively impacted them. They asked us to advocate to Government to reverse those changes.
How we care for the most vulnerable in our community is so important, so we were happy to agree to advocate to Government on behalf of our disability community.
