Wayne Bradshaw: What benefits from $51m spend?

Wayne Bradshaw

Mayor Lawrence Yule's proposal to spend $51.4 million on earthquake strengthening, a civic centre and a CBD hotel would increase rates from around 3 per cent to 8 per cent each year for the next 25 years.

Mayor Yule and Hastings District Council chief executive officer Ross McLeod asked the council to receive Tihei Heretaunga, the Independent Working Party Report on the Hawke's Bay Opera House and CBD Investment Project at this Thursday's council meeting.

The working party says there was a need for a "joined-up plan that defines a unique identity for Hastings, improves inner city utilisation and enhances social/economic performance" which "would align stakeholders and help make the proposed vision a reality". The gobsmacking part of this initiative is that the council will consult with the community on the Tihei Heretaunga Proposal but not on the total likely costs attached to this. Indicative costs to develop the three council facilities were included in the report.

-Earthquake strengthening for the HB Opera House may cost $11 million

-A new roof and floor for the HBOH Plaza, up to $2 million

-Strengthening the Municipal Building would cost $6.4 million

-The civic square redevelopment may cost $17 million

-Building a CBD hotel in the Municipal Building may cost $15 million

This gives an eye-watering total of $51.4 million. All of the $51.4 million would be borrowed and will take the Hastings District Council's total external debt over $130 million based on the current long-term plan.

A sum of $51.4 million borrowed over 25 years would mean the total amount to repay would be over $106 million with a monthly repayment of more than $350,000.

The planned rates increase in the Long Term Plan is around 3per cent each year, but the additional total costs of this new project will lift this to 8 per cent each year. Based on annual rates increase of 8 per cent p.a. the rates bills in Hastings District will double every 9 years.

If those are the costs, where are the benefits? We would get an Opera House and Municipal Building strengthened to withstand a 1-in-1000-year earthquake. We would get a council-funded CBD hotel. Has this been thought through? In the absence of a feasibility study there is no indication of viability of a hotel in the Hastings CBD when a new hotel is under construction, without council funding, a few kilometres along the road in Havelock North.

Cost overruns are a further chilling aspect of all projects and the Hastings District Council is not immune to this - case in point, the original HB Opera House redevelopment, original cost $2.2m, final cost more than $12 million.

What is the likely final cost of this $51.4 million project, Tihei Heretaunga, a "joined up plan that defines a unique identity for Hastings"? And how does it weigh up with other priorities in the district and region?

The Hastings District Council needs to address the current high debt and spending model it operates to ensure the rates are kept affordable for ratepayers.

Or do the ratepayers face more new taxes to be imposed on them, as promoted by Lawrence Yule in his role as president of Local Government NZ?

The mayor's $51.4 million Tihei Heretaunga spending plan needs to be put to the ratepayers in a full and transparent way that includes full costs in a binding referendum so all can have their say.

Unfortunately, when this was asked for, both the mayor and CEO declined to consider this.

-Wayne Bradshaw is a Hastings district councillor.

-Views expressed here are the writer's opinion and not the newspaper's. Email: editor@hbtoday.co.nz