‘Sting’ in the tail sees PGF projects needing ratepayer cash

The shade sails at the Allen Bell Park playground need maintenance and winter storage, which wasn't accounted for in the PGF funding they were bought with. Photo / David Fisher

The $800 million firehose of cash sprayed across Northland from the Provincial Growth Fund has revealed a “sting” in the tail that is going to hit ratepayers.

And that “sting” - as Far North Mayor Moko Tepania calls it - has emerged through sail shades at three playgrounds in Kaitāia bought with the money.

When it came to taking the shades down for winter, the Te Hiku o te Ika Revitalisation Project found it was facing a $9000 bill for maintenance, repairs and storage until they can be strung up again once winter has passed.

It was now shifting ongoing costs to the council, along with other projects that required ongoing spending, as its remaining funding dwindled to allow just enough for the new town square.

Inquiries by the Northland Age have found it is just one of a multitude of projects facing maintenance and operational costs which are likely to land on Far North District Council.

But no one interviewed by the Age was having second thoughts about taking the PGF cash, which also included the $7 million revitalisation project, as it created jobs and opportunities across the Far North.

With $800m of the $3 billion total spent in Northland, the region received the lion’s share of the “surge” funding cash spread across a range of organisations.

Tepania said there had yet to be a full accounting for what the projects were going to cost ratepayers.

“We haven’t even looked at the full costing of this. Totals from the PGF - that hasn’t been done at all.

“It is a bit of a sting that comes with this. You end up [between a] rock and a hard place. We really need these things, but the ongoing costs don’t get factored into the equation and the funding.”

Far North Kahika/Mayor Moko Tepania speaks on the taumata at Waihapa Marae.

Tepania said the issue wasn’t with the PGF alone, but with other Government grant funding schemes such as the Tourism Infrastructure Fund. He said it would fund public toilets needed to support Northland’s tourism industry - but each came with an ongoing $20,000 annual cost.

Tepania said it was part of the issue of local funding being discussed through a Local Government NZ committee in which he was involved.

“This is one of the things that needs to change in this space.”

The revitalisation project was a collaboration between the council, the Kaitāia Business Association and five iwi of the Far North’s Te Hiku region and the wider community. It won the Local Government Funding Agency supreme award in 2022, along with a string of other awards.

Kaitāia Business Association president Andrea Panther said it was fantastic the PGF had provided $7m to revitalise the centre of the town, but the emerging ongoing costs were troubling.

“That’s one of the major issues for this Government funding - no one really thought about the ongoing operational cost.”

Panther said it had been a struggle to find money to get the shade sails on three playgrounds down for the winter. After the initial project to get the sails, responsibility was now being shifted towards the council.

One of the parks with new shade sails at the time of its opening with Shine On Kaitāia representative Hinemoa Tipene, former Far North Mayor John Carter, Te Hiku Ward councillor Felicity Foy and Te Hiku Community Board chairwoman Adele Gardener.

“It’s an example of how none of that was taken into consideration when we got the money. It is going to cost ratepayers,” she said. “I would think the people in the council would be just as frustrated.”

Other projects funded out of PGF money were also going to need ratepayer support - the cultural gateway and accompanying pou needed restaining, while solar-powered lighting at the Awanui River walkway was an ongoing expense after it was targeted by vandals.

Awanui-born NZ First politician and Northland resident Shane Jones was the godfather of the PGF scheme when in Cabinet from 2017-2020 and said he was becoming aware of the pressure the projects were expected to have on council budgets.

Jones said his involvement was at a “high level”, but it was his expectation officials handling the PGF had made it clear to recipients there would be ongoing costs associated with the projects that were funded.

“It was ultimately a fund that was designed to meet the capital cost … and I would thought the council would be well aware that once you create these assets, certain obligations would follow over time.”

Far North councillor Ann Court said the situation gave truth to the saying there was “no such thing as a free lunch”.

Infrastructure Minister Shane Jones was the godfather of the $3 billion Provincial Growth Fund scheme. Photo / Peter de Graaf

“When this money was rolled out, it was all rolled out in a hustle. There wasn’t time for the items to go through the full financial modelling that you would with the Long Term Plan.

“Do you say no or do you tidy it up in the wash? Some of these things were desperately needed. I think the decision was made subconsciously, rather than deliberately, to say, ‘We will take the money and tidy it up after the fact’.”

Far North councillor Felicity Foy said assets transferred to the council were placed on the asset register where depreciation and operational costs were applied, meaning there would be an emerging picture of the cost.

In Te Hiku, she said those costs would be seen through a likely increase in the ward rate as projects were transferred to the council.

Compounding the issue, Foy said the large geographical expanse of the Far North, its comparatively small number of ratepayers and the influx of tourists and other visitors placed a burden on the district.

Local Government NZ president Stuart Crosby said the way the sector was funded needed to change to bring in greater support from central government. The PGF was an example of a sought-after central government fund that imposed burdens on ratepayers through ongoing costs that weren’t supported.

“The PGF, in my view, was a great initiative targeted at areas like the Far North … that needed a serious cash injection to catch up.”

Crosby said it had become increasingly costly to build and operate infrastructure and central government support had diminished since the 1989 local government reforms. He said eyes were on an upcoming review into the Future of Local Government intended to chart out the next 30 years of how it should operate.

The current system, he said, was “not sustainable”.