Whanganui District Council wants to sell assets to repay debt. Photo / Bevan Conley
Whanganui District Council wants to sell assets to repay debt. Photo / Bevan Conley
Whanganui District Council will have to sell at least $16 million of assets in the next year if it is to keep its rates increase to 10.6 per cent.
The council wants to sell the assets to repay debt and is asking Whanganui ratepayers to back the proposal without first identifying which specific assets could be sold.
The council revealed its draft 10-year long-term plan this week, calling for the district’s feedback on a raft of proposed cutbacks and plans to bring in more cash.
Whanganui Mayor Andrew Tripe said to get to 10.6 per cent the council would also need to decide on where to make more cuts and put up charges, but would keep an eye on the big picture and the future.
“The balance between affordability and aspiration is the challenge and opportunity with this long-term plan.”
To keep the next rates rise to 10.6 per cent for the average homeowner, the council plans to sell assets that could include land, buildings and reserves.
“We know it’s hard to agree with selling assets as a whole without any information on which specific assets may be sold,” the document said.
“This step is about seeing if the community would consider selling assets and, if so, we’d come back to the community on which specific assets may be sold.”
The council’s portfolio includes assets that are “not used to their full potential” and “many that are passive”.
“This means that they generate minimal or no revenue. For the council and community to receive any income from these, we would need to sell this asset.”
The asset sales would be used to repay debt and reduce costs, which would then be used to offset rates.
Whanganui Mayor Andrew Tripe.
The council is asking in its consultation document if the community would consider selling assets. If feedback is positive, the council will come back with specific assets.
Selling $16m of assets to repay debt would save $400,000 or $23 per property in year one of the 2024-2034 long-term plan, and double that from year two onward.
Any impact on services would depend on the particular assets that are sold.
If no assets are sold, $23 per property would be added to the proposed rates increase in year one, and $43 per property from year two onward.
Selling assets to repay debt is one of several points in a plan to keep rates affordable which includes: encouraging population growth; increasing non-rates revenue by raising fees and user charges; finding alternative funding sources such as central government or grant funding; efficiency savings such as restructuring management; postponing projects and reducing levels of service including cutting or closing services.
The council has already announced it will shut down two council-controlled organisations (CCOs), Whanganui District Council Holdings and economic development agency Whanganui & Partners.
Holdings’ subsidiaries will now report directly to the council’s CCO committee and the agency’s economic development functions will be taken in-house. The changes are saving about $317,000.
The consultation document said the council would now need to make at least $2m of cuts to council services, and would increase charges for parking, building and resource consents, burials, and using the swimming pool among other proposed fee increases.
It has already decided on service cuts worth $1.5m, including spending less on trees, shrubs and annuals, buying fewer library books, scrapping the Youth Council and the digital strategy implementation resource, and cutting back on park maintenance.
Preferred options for a further $500,000 of service cuts are detailed in the consultation document but the council wants feedback on the suggestions before making final decisions.
They include closing the Whanganui East outdoor swimming complex, closing and demolishing the historic Whanganui Repertory Theatre building, built in 1882, and closing the much-loved aviary at Rotokawau Virginia Lake.
The council also proposes closing the Davis Library for one day a week and ditching hanging flower baskets in the central business district.
LDR is local body journalism co-funded by RNZ and NZ On Air
