Rotorua Airport's upgrade costs questioned by councillor

Rotorua Aiport. Photo/File

The Rotorua Airport board has been asked to run its budget and proposed funding for redevelopments past Rotorua Lakes Council before it commits to upgrades in the next three years.

The council's Strategy, Policy and Finance Committee voted unanimously to make the recommendation today after councillor Rob Kent questioned the airport's capital expenditure budget.

The committee received the draft statements of intent for the four council controlled organisations: InfraCore Limited, Terax Limited Partnership, Rotorua Regional Airport Limited and Rotorua Economic Development Limited and then provided feedback before the completed statements are submitted before June.

The airport's statement included a $7.3 million budget to maintain and upgrade its physical assets.

In June last year, the airport's assets were valued at just under $45m.

It made $2.5m in the 2017 financial year and had $15m in debt to the council.

Councillor Rob Kent was concerned the $7.3m budget had not been discussed with the council.

"It was just assumed it would happen," he told the Rotorua Daily Post after the meeting.

Kent said he did not think it was necessary.

"Personally I do not think the airport needs a major revamp. Certainly not without rigorous questioning from council."

Councillor Karen Hunt disagreed.

"I attended the airport's AGM this year and saw their detailed plans. I think they make complete and sound business sense.

"Turning up at the AGM gives councillors the opportunity to hear more from the chair and the board."

Hunt said from her understanding, part of the cost involved upgrading security screening to the level seen in Wellington, Auckland and Christchurch.

She asked for the resolution to include aviation security costs, and this was not opposed by other councillors.

"Ratepayers foot the bill thinking we are spending on no sound basis but expenses like this [upgrading aviation security] are an essential government directive that we are forced to fund."

Rotorua Airport chief executive Mark Gibb told the Rotorua Daily Post the budget for redevelopment of the terminal and fire station had not altered from the $4.9m previously flagged in 2016.

At the time the airport said rebuilding the terminal and fire station would ensure the airport met building, health and safety and airport requirements, including earthquake strengthening regulations, and position the operation for the future.

"We have advised council that there may be additional costs resulting from requirements imposed by Aviation Security, these costs are yet to be determined as no formal works brief has been received or finalised," Gibb said.

He said the fire station works were under way and the council's Operations and Monitoring Committee was informed in March.

"We are currently engaged within a cost review for the proposed terminal design, on completion we will work through an approval process to proceed with the works. Given the scale of the commitment, this would include both Rotorua Airport Limited Board and Rotorua Lakes Council approvals.

"As we have previously advised the terminal redevelopment works would be funded from accumulated cash reserves and the existing Rotorua Airport Limited revolving debt facility with BNZ. Council has not been asked to fund the works."