Dual development costs have councillors concerned

23:00, Mar 03 2014

The prospect of Palmerston North stretching in two directions at once and running $300 million into debt in 20 years has city councillors worried and arguing.

The case for the council's proposed 900-house residential area at Whakarongo goes to a hearing next month, and a private plan change for a 2500-home suburb at Pioneer City West, toward Longburn, will be heard in May.

If both are approved, the council faces costs for making sure all the roads, pipes and parks are planned and provided on time.

Its contribution to ensuring City West is a well integrated part of the city has been estimated at $50m to $60m.

Finance strategy manager Steve Paterson said no matter how fast the growth areas developed, and how much the council put into Pioneer City West, it would challenge the council's debt limits.

It would leave the council little capacity for other major spending such as doing up its earthquake prone buildings or an overhaul of wastewater treatment.


"If circumstances change, the council might need to re-order its priorities if it wants to end up being financially sustainable," said Mr Paterson.

The warning prompted several councillors at yesterday's planning and policy committee to ask for more information about the implications of supporting City West instead of Whakarongo.

Committee chairwoman Annette Nixon resisted the request, because the idea of not proceeding with Whakarongo ran against council policies and strategies.

It amounted to a revocation of previous council decisions, which was outside the powers of a council committee, she said.

However, Cr Chris Teo-Sherrell forced a vote that her ruling be withdrawn, which had majority support.

Cr Lew Findlay said it would be dishonest not to collate and present the cost of the scenario of proceeding with City West alone to the hearings.

"This panel has to make a decision on the future of the city. It should be given all the information, not just the information that suits the council.

"Half the truth makes half a lie."

The committee asked for the report to be ready for the full council meeting at the end of March, which could then decide whether it should be part of the council's evidence to the hearings.

Pioneer City West developer John Farquhar said the whole report on affordability was guesswork.

"The projections made are so far into the future, the report is based on premise and not a lot of fact."

He said the council's submission opposing his private plan change showed a negative, anti-business attitude.

"Once upon a time this thing was endorsed by the council, and now we are at loggerheads."

Mr Farquhar said as a city resident, he did not want to see the council breaching its debt limits.

But he said the council was under-estimating the importance of development that provided more ratepayers to share the burden.

City planner David Murphy said staff already had most of the information requested about City West, as it had been the council's own preference for housing growth until the Christchurch earthquakes raised concerns about liquefaction risks.

He said if the councillors wanted the information to be put before the hearings panel, that could be done.

"But it is likely to be given less weight than the current strategic planning framework."

He said none of the council's strategy and planning work to date had considered development in both directions at the same time.

Manawatu Standard