We review the LTP every year as we go through the annual budget process to make sure we are on track. Every three years we review the LTP for the next decade.
Some of you will have read my previous article in Manawatū Guardian asking the community to make submissions, and suggesting some areas of spending you may be interested in submitting on.
I am pleased to say we received more than 1400 submissions. We held multiple days of hearings, where many people came and talked to their submission. Councillors then spent three days debating over 50 changes to the plan based on submissions read and heard from the community.
I’ll start with the good news. Councillors voted in favour of over $140 million of capital spending reductions. This included items such as reducing the Palmerston North to Ashurst and Palmerston North to Feilding shared walking and cycling pathways budget by $49m, reducing the Awapuni Library budget by $19m, and reducing the cycleways budget by $15.28m.
These changes took significant pressure off council’s need to borrow.
We also made a net reduction of about $1.3m to our operational spending in year one of the plan — over half of the almost $2.3m of reductions to year one’s operational expenditure I supported.
This meant we reduced things such as our year one consultancy budget by $1m, stopped implementation of an expensive new business sustainability fund, which would have cost $1.16m across the first three years of the plan, and more.
I do not believe we would have been able to get these reductions across the line without the significant number of submissions from the public calling for us to reduce spending.
Rates in Palmerston North for this year increased by 10.1%, compared with cities such as Upper Hutt at 19.93%, Dunedin at 17.5%, and Porirua at 17.5%. It shows things could have been a lot worse for Palmerston North.
In November 2023, early in the LTP process, Palmerston North’s minimum rate increase was proposed at 14.3%, so we have come a long way since then.
So, what’s the bad news? After all those reductions why are rates still set to increase by 29.97% over the next three years. In my opinion, we did not go far enough.
In the long-term, reducing our capital spend reduces our interest and debt repayment costs, the next generation will benefit from the over $140m capital reduction we made. But, in the short term, our failure to reduce enough operational costs has made the rates, in my opinion, higher than necessary.
Almost 50% of proposed operational cost reductions were not supported by my fellow councillors.
Ultimately, I voted against our Long Term Plan. I don’t believe our community can handle an almost 30% increase in rates over the next three years. It would not be fair to say the council has done nothing or that it hasn’t listened at all.
The plan is significantly different to where we started. Credit where credit is due, I appreciate my colleagues supporting a number of cost-reduction proposals. Although we made a lot of change, in my opinion, we needed to go further.
