Gary Simpson, the Porirua City Council chief executive, advised (July 29) the council only borrows to fund infrastructure renewals such as roads, pipes and wastewater treatment.
If borrowings are used only to fund new and replacement infrastructure, rates must have been used to fund the council’s (ratepayers’) purchase of land and buildings in the city centre, which are to be demolished for the redevelopment.
Every dollar of rates and other income spent on buying land and buildings, marketing Porirua, visiting overseas sister cities, etc, is a dollar less for infrastructure repairs and maintenance, and part of a dollar more for funding costs, other costs, and revenue lost.
The council only needs to borrow at all because rates and other income is being used for purposes other than infrastructure/core services.
Even with rates increases consistently above inflation/cost of living movements, and enormous deferred maintenance on roads, stormwater, sewerage, water and buildings, the council was still unable to avoid recording an operating deficit last year.
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