$1.5 billion spend plan hoists debt

Dunedin city councillors have passed up the opportunity to trim from an ambitious $1.5 billion capital spending programme before their draft 10-year plan goes out to public consultation.

The full programme - if approved by councillors in May - would propel debt from about $310 million this year to $869 million by 2031, smashing the previous $350 million debt ceiling.

"It’s a significant capital budget - nobody is pretending otherwise," Dunedin Mayor Aaron Hawkins said.

Councillors could decide which projects would remain in the plan after public consultation, he said.

Four councillors - Lee Vandervis, Jules Radich, Carmen Houlahan and Andrew Whiley - voted against the package of spending yesterday.

Faced with draft budgets that could lead to significant rates rises and a huge increase in debt,...
Faced with draft budgets that could lead to significant rates rises and a huge increase in debt, Dunedin city councillors are working out what sort of plan they should put to the public. Discussions about the draft 10-year plan were held in the Edinburgh Room of the Municipal Chambers yesterday and continue today. PHOTO: GERARD O’BRIEN
Cr Vandervis argued the council should scrap a $60 million central city upgrade, $53 million for transport projects and $20 million for "surface treatments" in the vicinity of the University of Otago.

"Let’s can $133 million out of this budget straight away, because we know the public don’t want it."

Cr Radich said the proposed escalation in debt was too large.

Council chief executive Sandy Graham conceded delivering the full programme, including about $150 million next year, would be difficult and staff would likely have recommendations by May to help guide decision-making.

It also emerged at the meeting that a possible gap between the spending proposed and what the council could deliver had been noticed by the Office of the Auditor-general.

Much of the planned spending boost flows from ageing water, stormwater and wastewater infrastructure.

More than $395 million is proposed for work in that sector.

During debate about the council’s finance strategy, Cr Vandervis said ratcheting up debt to more than double the previous ceiling was "one of the more abhorrent suggestions I’ve seen in all my years on council".

Deputy mayor Christine Garey said the council was being prudent, given the state of its assets.

Cr Sophie Barker said she was saddened previous councils had failed to invest properly.

Cr Rachel Elder said Dunedin was a growing city, but a shortage of housing had to be dealt with.

 

Comments

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"$20million for "surface treatments" in the vicinity of the University of Otago"
What will OU be contributing to this ?
As a government entity, there is no requirement for them to pay rates.
That means they get their water, waste treatment, roading, busses, parks and recreation facilities etc paid for by the rate payers of the city just like all the other government departments. As government grows and grows the burden placed on everyone else grows and grows.
Auckland is NZ's biggest Uni with 33,000 students in a city population of 1.6 million representing 2% of the population.
OU has 18,000 in a city of 120,000 being 15% of the population.
That is over 7 times the weight Dunedin ratepayers carry compared to Aucklanders.
The water and drainage maintenance that Cull and co neglected needs to be addressed but other than that, the future sounds too uncertain to go dumping the next generation in that much debit on the pretence that we are trying to give them a better world.
The very notion that this council carries a moral prerogative that passed generations neglected because of 'climate change' is a fallacy that underlines their arrogant, elitist perspective on the world.

It's only general rates that the university isn't charged for.

They pay for their water as a commercial customer based on metered water use.

Any targeted charges they are liable for.

ONLY general rates!!!
My general rate is $1329.00 for next year.
That is over 55% of the total on a residential property. I sure commercial would be higher.
So what you’re saying is the OU and other government entities are getting ONLY a 55% discount so why raise the issue.
I’m sure the company I work for would very much appreciate a 55% discount too.

You need to open your eyes to what is going on

Problem is, the uni has focused on becoming a property investor without paying rates. They buy off landlords who pay rates!

The Stadium decision and ORFU default. There are various factors.

Maybe the council should concentrate spending on essential services and forget about making things "look pretty" ... they do have to realise that there are a lot of people out there at the moment who are struggling to make ends meet. Elderly people on fixed income, people who have lost employment due to covid, etc.

Dunedin and surrounding districts may well be without the usual tourist dollars coming in for some time, possibly a year or more and at the same time, exports are also taking a dive and prices on most everyday purchases are also climbing at an alarming rate. Most of this is being put down to covid, but I'm pretty sure there's a few who are just banging on another 15 - 20% and using it as an excuse.

Core services first please ... let's stop the "unessential" spending for a year or two until we have sewage & water infrastructure upgraded so we're not all ankle deep in $h!+ ...

Aaron Hawkins rebuttal is irrelevant. Inferring that anything other than a best case scenario is some sort of contagion of negativity and ultimate doom is ridiculous. The mood in the city is already sombre with stagnant growth a dying CBD. To suggest that decision making should be based on the level of positivity it portrays is ridiculous.

This pigsty of a Council (minus the four who voted against the budget increase) is set to increase debt by a staggering 180%, from $310 million to $869 million, as stated in this article.

In that case, Christine Garey's statement ---that "the council was being prudent, given the state of its assets"--- is either a mendacious lie or a monumental idiocy.

An increase of debt by 180% is, somehow, prudent? Does this woman even know the meaning of the word? This is truly flabbergasting; perhaps next we will see her and her minions on Council decree that 2 + 2 = 5, because they say so.

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