Palmerston North proposed rates rise could be close to double figures

Palmerston North city councillors have had their first look at its plan for next financial year, and it would take a 9.5% overall rates rise to pay for it.

Councillors held a workshop on the proposed annual budget this week, and the information presented is publicly available.

The council’s rules are that no decisions can be made at workshops, but after an Ombudsman’s ruling on a Stuff complaint about the conduct of workshops, most workshops and the information presented to them are public.

The documents presented to the workshop indicated a 9.5% rates rise would be needed to cover the draft work programme, up from the 8.3% rise forecast in the council’s 10-year plan.

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While the council is likely to be under pressure to prune back in light of inflation and interest rate rises on household budgets, Palmy BID chief executive Rob Campbell has already put in a request for the council not to slash its spending.

He said after the first Covid-19 lockdown, the council shrunk its activities significantly.

The rates rise for 2020/21 was 1.95%.

Campbell said while it was important to be fiscally responsible, the circumstances were different now and businesses wanted the council to maintain momentum.

Council staff have had their first review of capital projects planned for the coming year, and at $117 million, acknowledged that was an unrealistic amount to actually deliver based on past performance.

Their first cut, identifying projects that could be put off, lowered the target fo $69m.

Among the likely casualties was a $1m budget for planning a $14m programme for providing social housing.

Another $1.5m would be shaved from a programme to buy and develop reserves at the Kikiwhenua subdivision at Te Wanaka Rd, where negotiations about purchasing land had stalled.

Other work deferred could include the urban bus terminal, part of the programme for seismic strengthening of council buildings, the Streets for People upgrade of the next section around The Square, the city’s end of the shared pathway to Feilding, and a raft of roading projects.

Staff have recommended the council plan for inflation running between 3.5% and 5.1%, which was higher when the 10-year plan was adopted, and for interest on debt to be an average of 4.2%.

Councillors will review the draft plans at its full public meeting on March 1, and clear the documents to go out for submissions on March 15.

Submissions hearings will be held in May, with final decisions on the rates rise in June.