The next 10 years will be a time of great opportunity for all of regional New Zealand, and we need to harness that opportunity to build the future we want for our city and our people.
Last year, we developed a vision for Palmerston North: Small city benefits, big city ambition. This reflects the value we all place on the great quality of life, community spirit, and affordable access to services that come with being a small city, as well our ambition to have the opportunities larger cities offer.
Unlocking these opportunities calls for well-planned growth and sustainable management of our infrastructure resources.
This 10-Year Plan presents our perspectives as your Council on the best approach to realising that shared vision and specific proposals for you to provide your feedback on.
Business as usual
The vast majority of the 10 Year Plan delivers business as usual services. $590 million of the $765 million capital spend is on basic infrastructure like roads, water supply, wastewater, stormwater, rubbish and recycling, and sports facilities, parks and reserves.
We need to make prudent investments for the future that will ensure our city thrives. We also need to balance affordability for the ratepayers of today and future generations.
Key projects in the 10-Year Plan
Future-proofing our wastewater system. Our consent to discharge treated wastewater from the treatment plant into the Manawatu River expires in 2027, so we need to upgrade or replace the treatment plant over the next 10 years. At this stage we don't know the most practicable treatment and disposal option for this – and hence its cost is unknown. For now we have put $128.8m ($110m without inflation) in the budget between 2023 and 2027. This is the current estimated cost of state of the art treatment with continued discharge to the river.
Other options are land or ocean discharge, and these could cost up to $250m to $300m. We'll review the options by June 2021 and we will do this with extensive community consultation so we can balance regulatory compliance requirements with community expectations and our ability to pay for the project. Please think about this as you read. We have put an appropriate amount in the budget. If it ends up costing more we may need to review our debt and rates policy limits and our priorities for other projects.
Creating a more vibrant city centre will in turn attract and retain business investment that will deliver further benefits to the people of Palmerston North.
Developing recreation activities along the Manawatū River, which will deliver lifestyle benefits for our residents, and contribute to our city’s attractiveness as a place to visit or choose to live in.
There are no priorities between the projects. We believe they are of equal importance and create an integrated package to benefit the city.
Kaua e rangiruatia te hapai o te hoe; e kore to tatou waka e u ki uta.
Do not lift the paddle out of unison or our canoe will never reach the shore.
In order to fund existing council services and the key projects we're proposing to deliver on our draft vision, rates would need to increase. In year one, the rates increase would be 6.4 per cent. That equates to an extra $2.80 a week for the average residential ratepayer.
We know any increase in rates is not welcomed, but we need to do more than be conservative and just tread water. Otherwise we risk missing the huge opportunities ahead for our region from demographic, technological, economic, social and environmental changes. These changes create new opportunities for our traditional sectors such as defence, research, education, agribusiness, health and logistics, as well as new, wider opportunities to diversify our economy and enable the city to reach its potential.
It is important to remember that even if we were to do nothing more than we are already doing today and not invest in the key projects proposed, there would still be a rates increase to cover increasing costs. That means just to stand still you would have, on average, a rates rise of 3.5 per cent in year one.
It is also important to note that 40 per cent of our funding comes from sources other than rates.
Many of the projects we invest in have long-term benefits, which future ratepayers will be able to enjoy. We are mindful of the need to share the costs of these projects across current and future generations, so that the current generation is not disproportionately impacted. We achieve this by funding projects through debt, which means they can be paid off over time by ratepayers across generations. In this context, we are proposing in this 10-Year Plan to raise our debt level from $109m to $349m. This is based on achieving the projects outlined on this website, including our best estimate of the wastewater cost.
At the same time, we're also proposing to pay down our debt faster to deliver significant long term savings from paying less interest (just like a mortgage). We are proposing to reduce the term of our debt from 30 to 20 years, which will save $10m in interest over this period. This saving can in turn be put to use on other projects to deliver on our vision.
To pay back our debt faster, we need to pay more off as we go, so 1.7 per cent of the proposed 6.4 per cent rates increase is the additional cost of debt repayment. We think this is financially prudent, while still enabling us to invest wisely for the future.
What do you think?
We encourage you to think about the big picture and imagine what Palmerston North could be like in 2028, and give us your feedback on whether you think we’re charting the right course to get us there.
We want your feedback and input on all of the proposals in our 10 Year Plan so that it truly reflects the community’s wishes. The plan will be finalised and formally adopted in June, after we've considered all of your feedback.
You can find a lot more detail in the supporting information that you can download through this website, or come into the Council office and service centres. We’ll also be out in the community talking to you.