Councillors shown how rate rises could easily get out of hand

A109 Light Utility Helicopter flight with mayor Gisborne City from the air in November 2023.

Opinion

The council’s chief executive gave members a reality check on Thursday when she told them necessary infrastructure investment and projects they were discussing could, if all promoted into the eight remaining years of their 10-year plan, cost ?$74 million more than they were now planning to spend.

It was a strong challenge from the CEO, who could be in her final months with the organisation.

Judy Campbell’s legacy would be enabling the council to deliver total rate rises of 2 percent a year while still pushing through some major community projects — thanks to generous grant funding, as well as restructuring.

Her warning was that the council could return to “the old days” of 7 percent rate rises if it did not show financial discipline.

Among infrastructure spending increases, the big change is for fixing wastewater pipes in the city. This is now expected to cost $16.6 million more than the $22m budgeted, plus a potential $13.2m of private capital costs where the council might have to provide funding to help individual landowners. The council has also tweaked up expected investment in the wetlands project from $12m to $17m — but there is potential for a much bigger hike there, with advice the wetlands could cost up to $60m . . . which might see the council instead proceed with a second wastewater treatment plant at a cost of about $40m.

The finance impact modelling exercise added costs of the following “wishlist” projects: a rebuild of the observatory, the Taruheru walk and cycleway cost increasing from $2.85m to $5m, and potential land aquisition costs added to the inner harbour redevelopment project. It also removed parking revenue of $560,000 to $790,000 a year, following an instruction to staff to explore the possibility of free parking in the CBD — and included about $4m for “legal matters” yet to be settled.

It was a reminder to councillors that they cannot do everything they want to, that Gisborne Holdings has to be a successful income generator, and that they need to foster good relations to keep grant funding flowing.