Palmerston North rates: Council should reduce costs now says councillor Karen Naylor

Palmerston North city councillor Karen Naylor says for the council to progress everything in its long-term plan debt would increase to $660m. Photo / Kevin Bills Media

OPINION

The biggest driver of Palmerston North City Council’s proposed rates increase is servicing the debt used to fund the proposed new infrastructure.

We cannot fund all these projects through normal means, so are looking at external borrowing from the Government to fund some of this.

Our auditor has said there is uncertainty and risk about whether our plan is fundable or deliverable.

Some have suggested that if we can’t borrow the external money, we would need to look at reducing our projects and services in the future. I believe it is more prudent to reduce our projects and services now.

We are proposing $2.3 billion of capital expenditure, which includes $1.5b of new assets. $442 million is to look after what we already have (renewals) and $296m to fund growth. It’s important we look after our assets, so we have stepped up our investment in renewals by $100m.

Of the $1.5b of new projects, $647m is for the wasterwater project. The other $906m includes many optional projects.

We’ve had significant investment in infrastructure in recent years and now our debt is close to $250m.

To progress everything in our long-term plan our debt would increase to $660m as well as the additional $647m that will need to be repaid for the wastewater project. The total of about $1.3b would mean significant increases in interest and debt repayment. This would all need to be funded by ratepayers.

We need to hear from you about which projects you think are important and which could be deferred or decreased. Some of the big projects planned are:

• community hubs $35m
• Arena development $36m
• shared pathways $55m
• Te Manawa $67m
• Central Library $65m
• City Centre transformation $22m
• cycleways in the city $31m
• Te Motu o Poutoa - marae and visitor centre $19m
• social housing $17m
• bus depot $21m

Another driver for rates increases is the increases in services we provide. Some of the new costs proposed include $230,000 for a homelessness initiative, $301,000 for a business sustainability fund, $100,000 in grants for non-council-owned pool upgrades, and $200,000 of additional funding for Globe Theatre and Te Manawa.

Other proposed new costs include a $130,000 increase for international relations and $100,000 for city centre planning.

We’d love you to tell us what you like and what you don’t like about our proposed plan. If you think we should make changes, please be specific about what these should be. Submissions close at 4pm on May 9 and can be made at pncc.govt.nz/Participate-Palmy/Have-your-say/Long-Term-Plan.

If you’d like to find out more email karen.naylor@pncc.govt.nz.

Karen Naylor is a Palmerston North city councillor.