Whanganui eyes $16m in asset sales to offset rates

Posted 1 January 1970 by Moana Ellis
Whanganui's main street and shopping area, Victoria Avenue.

The hanging baskets on Whanganui’s main street Victoria Avenue are among items the council is considering in cost cutting. Whanganui ratepayers have been asked to back asset sales to keep the rates increase to an average 10.6 percent. Photo: LDR/ Moana Ellis

Whanganui council will have to sell at least $16 million of assets in the next year if it is to keep its rates increase to 10.6 percent.

The council wants to sell the assets to repay debt and is asking ratepayers to back the proposal without first identifying which specific assets could be sold.

The council revealed its draft 10-year Long-Term Plan this week, calling for the district’s feedback on a raft of proposed cutbacks and plans to bring in more cash.

Mayor Andrew Tripe said to get to 10.6 percent the council would also need to decide on where to make more cuts and put up charges, but would keep an eye on the big picture and the future.

“The balance between affordability and aspiration is the challenge and opportunity with this long-term plan.”

To keep the next rates rise to 10.6 percent for the average homeowner, the council plans to sell assets that could include land, buildings and reserves.

“We know it’s hard to agree with selling assets as a whole without any information on which specific assets may be sold,” the document said.

“This step is about seeing if the community would consider selling assets and, if so, we’d come back to the community on which specific assets may be sold.”

The council’s portfolio includes assets that are “not used to their full potential” and “many that are passive”.

“This means that they generate minimal or no revenue. For the council and community to receive any income from these, we would need to sell this asset.”

The asset sales would be used to repay debt and reduce costs, which would then be used to offset rates.

The council is asking in its consultation document if the community would consider selling assets. If feedback is positive, the council will come back with specific assets.

Selling $16 million of assets to repay debt would save $400,000, or $23 per property, in year one of the 2024-2034 Long-Term Plan, and double that from year 2 onward.

Any impact on services would depend on the particular assets that are sold.

If no assets are sold, $23 per property would be added to the proposed rates increase in year 1, and $43 per property from year 2 onward.

Selling assets to repay debt is one of six points in a plan to keep rates affordable. The six points are:

1. Encouraging population growth over the next 10 years from 49,000 to 53,000 (0.8 percent per year), to spread rating costs across more people.

2. Increasing non-rates revenue by raising fees and user charges including building and resource consents, trade and tankered waste, use of swimming pools, burials and parking.

3. Finding alternative funding sources such as central government or grant funding.

4. Efficiency savings such as restructuring management, postponing projects and cutting the number of council vehicles.

5. Reducing levels of service including cutting or closing services.

6. Selling assets to repay debt.

The council has already announced it will shut down two council-controlled organisations (CCOs), Whanganui District Council Holdings and economic development agency Whanganui & Partners. Holdings subsidiaries will now report directly to the council’s CCO committee and the agency’s economic development functions will be taken in-house.

The changes are saving around $317,000.

The consultation document said the council would now need to make at least $2 million of cuts to council services, and would increase charges for parking, building and resource consents, burials, and using the swimming pool, among other proposed fee increases.

It has already decided on service cuts worth $1.5 million, including spending less on trees, shrubs and annuals, buying fewer library books, scrapping the Youth Council and the digital strategy implementation resource, and cutting back on park maintenance.

Preferred options for a further $500,000 of service cuts are detailed in the consultation document but the council wants feedback on the suggestions before making final decisions.

They include closing the Whanganui East outdoor swimming pool, closing and demolishing the historic Whanganui Repertory Theatre building which was built in 1882, and closing the much-loved aviary at Rotokawau Virginia Lake.

The council also proposes closing the Davis Library for one day a week and ditching hanging flower baskets in the central business district.

Local Democracy Reporting is Public Interest Journalism funded through NZ On Air