One thing to consider when choosing between the options is cost, though the difference between them, and the different effect on rates, is not large. The cheapest option is not necessarily the best. It comes down to a judgement about the best value for money for ratepayers and the community, and there are valid points of view on either side.

Capital projects of this sort are not paid from a single year's rates. The Council borrows the money to build, and then pays the loan back gradually over the lifetime of the building. It is a balance between spreading the cost over generations of Nelsonians who will use the facility, rather than asking today's ratepayers to cover the full bill upfront.

Bar chart of Nelson City Council projected net debt from 2024/25 to 2033/34. Net debt rises from $252.3 million to $504.3 million. The Civic Hub portion within the Long Term Plan reaches $63.8 million by June 2034, which is 12.7 per cent of projected debt. If additional option debt is added, the June 2034 total would be $514.1 million for Option 1, $514.9 million for Option 2, or $529.1 million for Option 3.
Nelson City Council projected debt levels 2024–2034. Source: Long Term Plan 2024–2034. This graph shows debt forecasts only, not capital costs.

Each option adds a different amount of debt, and so a different amount to your rates. The chart above shows the Council's projected net debt over the Long Term Plan, with the Civic Hub provision and the effect of each option highlighted.

Council's debt relative to its assets

The Council is also mindful of the level of its debt relative to its assets, and needs to make sure this is well managed. The chart below shows the Council's projected total assets alongside its projected net debt, with the additional asset value of each option noted beneath.

Bar chart of projected Council total assets from 2024/25 to 2033/34, growing from $2,603 million to $3,686 million, with a line showing projected net debt rising from $252.3 million to $504.3 million. Additional asset value at June 2034 would be $10.0 million for Option 1, $10.9 million for Option 2, or $25.1 million for Option 3.
Projected Council total assets and net debt, Long Term Plan 2024–34.

The Civic Hub is a small part of Council's spend

The Council's current Long Term Plan (2024–2034) makes provision for $45.7 million for replacing the Elma Turner Library and $22.7 million for the upgrade of Civic House, a total of $68.4 million*. These amounts are included in future levels of rates, and equate to around $207 (incl. GST) a year. The figures in this document show the amount over and above the existing Long Term Plan for each of the three options. The Council is confident it can keep rate increases to less than 5% under all three options.

Donut chart of the Long Term Plan capital programme totalling $1.062 billion: Transport $307.6 million or 29.0 per cent, Wastewater $200.3 million or 18.9 per cent, Other capital expenditure $196.0 million or 18.4 per cent, Water supply $131.1 million or 12.3 per cent, Stormwater $102.6 million or 9.7 per cent, Civic Hub $68.4 million or 6.4 per cent, and Flood protection $56.4 million or 5.3 per cent.
Civic Hub provision and option costs
Current LTP provision:$68.4m
Option 1 (inflated):$79.6m
Option 2 (inflated):$80.5m
Option 3 (inflated):$95.8m
Option 1:+$11.2m
Option 2:+$12.1m
Option 3:+$27.4m

NB: The option costs above include inflation, so they can be compared like for like with the inflated $68.4M in the Long Term Plan.

A small share of a big programme

Across the ten years of the Long Term Plan, the Civic Hub provision is about 6.4% of the Council's total capital programme. Most of the Council's capital spend goes to core infrastructure such as transport, water and wastewater.

Why the costs have gone up since 2024

The option costs in this document are higher than the $68.4 million set aside in the Long Term Plan. The figures have been updated with more accurate information than the estimates available in 2024, when the Long Term Plan was put together. Inflation since then has also pushed up costs. Rising prices will continue to be managed through future Long Term Plans.

* Inflated capital expenditure for the Long Term Plan 2024–2034.