Mayor’s foreword - Kupu whakataki
Kia ora Nelsonians,
Annual Plan context
The development of the Nelson City Council Annual Plan 2023/24 has been the most difficult in years due to the combination of tens of millions of dollars in the costs of repairs from the severe weather event last August, the significant increase in the cost of depreciation after a revaluation of Council assets, the sharp rise in interest costs, and increased Council costs from the high rates of inflation.
Cost of living pressures
We are very aware that households and businesses are facing the worst inflation in 30 years. Council is too small to be able to offset the scale of the increased costs families are facing in food, rent or mortgage payments, electricity etc. We are doing everything we can to keep the rates increase as low as possible while maintaining the Council services needed for our community and businesses to function properly. As residential rates make up about 4% of household expenses, our objective is to avoid rates compounding the cost pressures by exceeding the rate of inflation. We have managed to get the proposed average rates increase down to 7.2%.
August weather event recovery
I made a commitment during the 2022 local elections to prioritise the recovery work from the severe weather event in August. We need to do more than just fix the damaged pipes, roads, tracks and parks – we need to rebuild them more resiliently so they are less likely to fail in any future weather event. The combination of this repair work on top of Council’s existing capital works programme means, in the next year, the programme will be the largest in decades.
We have to decide on an appropriate period to spread the cost of the recovery works. If we tried to fund it in one year, the rate increase would be crippling. If we spread it over too many years, we risk not having paid it off when the next major event hits. We have proposed a period of 10 years on the basis that it is 50 years since we last had an event of this scale, albeit climate change is likely to increase the frequency of damaging storms. We welcome feedback on whether this 10-year timeframe is reasonable.
Keeping Nelson liveable
Every council walks a line between minimising rates increases and ensuring its community does not stagnate. I do not see room in this three-year term for any new major civic projects. Council deferred the new library because of concerns over the $46 million estimated cost and the proposed site. We have made provision for preliminary work on a replacement surf lifesaving/sports facility at Tāhunanui Beach and an arts hub in the city. My hope is that the economy will recover, giving room for these investments in future years. These sorts of projects have long lead times and it is prudent to start the investigation work on them in the next year to give us the option to proceed to construction if the projects stack up and the economy improves.
This document is focused only on changes in 2023/24 to what is already included in Council’s Long Term Plan 2021-31 and should be read in conjunction with it. There are dozens of important projects covering climate change, transport improvements, water upgrades and parks improvements that are included in 2023/24 through the provisions in the Long Term Plan. We will, later this year, begin engaging with the community on the next 10-year plan and will welcome your input.
Uncertainty over three waters
The greatest uncertainty in forward planning for Nelson City Council is the current Government’s significant three waters reform programme that will have a massive effect on Council. It will see $750 million of Council water assets and $70 million of debt taken off Council and transferred to a new government water entity covering the East Coast of the North Island including Wellington as well as Te Tauihu (top of the South Island). We are also concerned that it may result in the loss of local control of reserves, of which 9000 hectares, or 80%, are deemed reserves for water purposes but extensively used for recreation. We are also concerned about the impact on our Council-owned company, Nelmac. Whilst there is a diversity of views around the table, the newly elected Council does not support the three waters changes as currently proposed, and believes Nelson and our ratepayers may be disadvantaged if it proceeds. Nelson has a good track record of investing in water infrastructure such as the Maitai Dam and the Tantragee Water Treatment Plant. I am working hard to try and retain local control of these important assets. If these reforms proceed, they will be very disruptive to Council’s work in 2023/24 as we transfer staff and assets, novate contracts and reconfigure our organisation. We will need to increase the rates rise in 2023/24 to 8.2% if we are unsuccessful in stopping the transfer of Nelmac assets to a water entity.
Opportunity to comment
We welcome your submissions and comments on our proposals online or in writing. We would also welcome you dropping by our caravan at the Saturday Market to pass on your views.
Ngā mihi nui
Hon Dr Nick Smith
Mayor of Nelson: Te Koromatua o Whakatū