Striking balance between cost and progress
New Plymouth District Council meets on Tuesday to debate its Preliminary Draft Annual Plan for 2013/14. The draft plan has been put together following a thorough review of all council activities and services, seeking ways to reduce costs and minimise the rates it collects from the community.
Contrary to the views and writings of some, all members of this council are committed to keeping rates as low as we possibly can. We have below-average residential rate levels, compared to other provincial centres, and we believe the community wants to keep it this way.
It is worthy of note that, since the last elections, this council has cut more than $7 million a year from its planned spending for the next seven years.
Our job as councillors is to strike a balance between holding rates down and achieving our strategic goal of keeping New Plymouth District a great place to live, work and visit. We are always seeking ways to provide maximum value for minimum cost, and our chief executive is committed to running the organisation as cost-effectively as possible.
The 2013/14 annual plan will be signed off in late June, following further council debate and five weeks of public consultation from March 25 to April 26. At this stage the proposal is to further reduce our spending by $1.4 million for the 2013/14 year (on top of more than $6m of savings achieved for 2013/14 in the Long-Term Plan). We plan to replicate these savings and aim to increase them in the next few years and beyond. Some other savings ideas are also signalled that will require further consideration in future years.
The $1.4m savings for 2013/14 have been identified in the following areas:
Internal overheads $603,000
Major Events Fund $200,000
Recreation and Events $45,000
Puke Ariki $48,000
International Relations $30,000
More information on these savings is contained in a detailed report on the Activity and Service Review, which is available now on our website, along with the agenda for Tuesday's meeting. From the home page please go to Council Documents>Agendas and Minutes>Council Meetings.
We are also proposing to significantly reduce the amount we take each year from the Perpetual Investment Fund (PIF).
The projected annual release payments are:
$10.7m for 2013/14 (compared to $17.1m signalled for 2013/14 in the Long-Term Plan 2012-2022)
$9.4m for 2014/15
$8.5m for 2015/16
Rising steadily to $9.1m for 202 1/22
We feel strongly that it is time to more fully address the future of the PIF as a perpetual income source for this community.
The global financial crisis has had a major impact on investments around the world and our fund has been no exception. It has returned $107m since inception in 2004, but the community has benefited through $170m of release payments.
It is my aim that this council lives within its means. When I campaigned to become mayor in 2010 I raised the council's release payments from the PIF as an important issue to be addressed. We began tackling this problem soon after the election by reducing our release payments and have continued that approach in the last two years. However, the continuing global financial crisis means that more immediate action is required and that's why we are proposing such a significant cut in the release payments going forward - to ensure our children and future generations can enjoy the same benefits from the fund that we have.
So, what might all this do to the rates? Well, as you may have read, the net result of the review and examination of the PIF is a projected rates increase for 2013/14 of 4.6 per cent, rather than the 6.6 per cent anticipated for that year in the Long-Term Plan (the 6.6 per cent was due in large part to building the Waitara to New Plymouth sewage pipeline, and the associated upgrade of the New Plymouth Wastewater Treatment Plant). The $1.4m of savings, along with reduced general rate renewal funding and modest temporary deficits, have helped to make this reduction possible.
Following Tuesday's meeting, the draft plan will be finalised and reviewed by Audit New Zealand, before the council meets on March 12 to formally release it for public consultation. As always we hope to get as much community feedback as possible, so please take part and give us your thoughts during the public consultation period.