City plan might not be realistic
The time has come for Palmerston North residents to have their say on the city council’s draft long-term plan which indicates a total rates rise of 11.3% in the coming financial year.
But it is a draft of a plan which Audit New Zealand has signalled will probably attract a qualified audit opinion because there is too much uncertainty about whether it can possibly be done.
Audit NZ director Debbie Perera was at the council meeting when the draft consultation material was signed off for public consultation.
There were two areas of concern. One was whether the council would be able to use the Crown Infrastructure Partners system to raise up to $647 million for the Nature Calls wastewater management overhaul.
The council’s balance sheet is not strong enough to borrow that much money itself, but it could be done through a special purpose funding vehicle, keeping the debt off the council’s books, but it would still come with a levy of about $1000 a year per ratepayer for 30 years.
The other issue was the sheer size of the council’s capital programme for the next decade, a total of $2.3 billion.
Perera said in the past, the Palmerston North council had not delivered all of its planned capital projects, but this plan saw the size of the programme ramped up.
She and council staff were still working on assessing whether the programme was realistic.
The council has included a couple of pages in its consultation document explaining those two risks.
Mayor Grant Smith said he understood councillors did not like putting up the rates, and ratepayers would not like it either.
But he said the council had done its best to come to a starting point for consultation that included a rates rise among the lower quarter for all councils around the country.
He said it would take a 6.7% rates rise to simply stand still, paying interest costs, repaying debt, paying utility and insurance bills.
“We have worked very hard over the past five months to review everything we do.”
He said it was important the city continued to invest in its roads, housing and water services, and carrying on with Nature Calls and many of the infrastructure projects was something it was legally bound to do.
Water was the biggest cost – with more than $1b proposed to be spent in total including Nature Calls, drinking water to meet new standards, and stormwater.
This consultation round asks for community views on many issues beyond the simple rates increase.
One is the proposed move to a new rating system, calculating 30% of a property’s rates based on its total capital value, and the rest on land values.
A rates search tool on the council’s website has been built so people could see how much their rates would change depending on whether the council used land value, capital value, or its preferred hybrid model.
Another issue was about upgrading community facilities, and building new ones – $27.1m for the new Awapuni community library and hub, $36m on CET Arena, and $19.1m on a civic marae at Te Motu o Poutoa/Anzac Park.
There was also the challenge of earthquake-strengthening buildings, including the Central Library and Te Manawa.
The council has arranged a series of drop-in sessions, a “Planning Palmy Expo” and online chats ahead of the deadline for submissions on May 9.