Stay calm, Hastings debt is heading for $103m

LAWRENCE GULLERY
Hastings' public debt will climb to more than $103 million by 2010/11 but there's no reason to panic, says the Hastings District Council's corporate services manager, Ross Franklin.
The gross public debt for 2006/07 sits at just over $98 million and figures from the draft long-term council community plan predict the debt will rise to $103,865m by 2010/11 and then settle at $85m for 2015/16.
Mr Franklin said the debt figures are driven by major development projects the council has planned for the next 10 years. Projects for 2006/07 include Nelson Park ($18,567m); stage three of the Opera House development ($2.2m); district sports park ($1.1m) and wastewater treatment ($1.827m).
In 2010/11 the major projects the council will be borrowing money for are the Ngati Kahungunu Centre, library and archives development plans and the northern arterial route. In comparison, Napier City Council's gross public debt for 2006/07 is $54m, will peak at just over $74m in 2008/09 and settle to $60m in 20015/16.
Central Hawke's Bay Council is in the process of calculating its debt requirements for its long-term community plan but corporate services manager Kevin Brown said the council's gross public debt sits at just over $8m as of June 2006.
Mr Franklin said the Hastings council had to bear the costs of setting up infrastructure for any new developments, such as preparing storm water, power and roading systems.
He said these costs were "paid up front" and over time the council earned money back from the projects through levies paid by the developers.
"There has been a lot of growth (in the Hastings district). Because we are talking about a 10-year plan, there are a lot of developments that could be opened up," Mr Franklin said.
"We are going to have to provide infrastructure for those areas and we are not going to get it (the money invested) back in year one," he said.
Mr Franklin said it was unlikely the debt would ever by reduced to zero and the best that could be done was to manage the situation.
"The key is managing this debt. It's not the amount of debt. All councils are the same. If you have a community growing, you've got to provide the infrastructure to go with it. I looked at the long-term community plan for Hamilton and they're going to reach $100m to $500m (in debt) over a 10-year horizon," Mr Franklin said.
Full details of the public debt and key financial figures, and a summary of loans can be found in the draft long term council community plan.