Growing pains

It is the turn of the Queenstown Lakes District Council to again face hard decisions on the future of important projects.

Faced with skyrocketing debts, up to $413 million by 2019, the council has proposed deferring nine large projects.

Realistically, given the small rating base, it had little choice because the buck has to stop somewhere.

Rates cannot keep climbing, and paying largely by debt just creates a larger problem in later years.

Responses have, not surprisingly, been immediate, with the delay in two major Wanaka capital projects worth $21.5 million - the $11.5 million pool and the $10 million indoor stadium - sparking disappointment from interested groups.

Such delays are unfortunate but inevitable whenever councils make tough choices about priorities.

Wanaka remains a relatively small town and some of the worthwhile ambitions must be restricted for now if rates are going to remain manageable.

Similarly, each of the other postponed projects looks worthwhile and any delay will cause concern.

Despite the postponements, the council (and therefore its ratepayers) is still in difficulties.

Although the council proposal to push the projects out beyond the next three years has bought some time, this is only a temporary answer.

For that reason, the Audit Office has taken the unusual move of calling what is planned "not financially prudent".

Projects are piling up in a log jam over the last five years of the council's 10-year long-term community plan, just putting off the days of reckoning.

The council, nevertheless, has created some breathing space to, as it says, review justifications and scope, and find alternative solutions and funding for its proposals.

Might it make more sense, for example, for community sharing of the gymnasium with Mt Aspiring College (now under pressure) to extend to a new facility at the planned primary school?Queenstown Lakes and Tauranga, the two districts given the unusual Audit Office warnings about debt, share the challenge of designing facilities (including basics like roading, sewerage and water reticulation) with much higher numbers of residents and visitors in mind, even though extra development and additional ratepayers are yet to arrive.

To a degree, therefore, they are special cases that should be able to put more of their capital spending on long-term loans.

But, as acknowledged by the council, relying on yet-to-materialise developers and ratepayers is risky.

The council estimates 49% of its capital spending in the 10-year plan is "growth driven".

Infrastructure growth includes water supply ($167 million), wastewater upgrades ($133 million) and roading ($315 million).

Present projections see the population of the district rising from the average-day figure of 35,777 in 2006 to 68,305 in 2029.

The peak number comparisons are 77,000 and 137,404.

But nobody knows what the future holds, even for a district of such vivid and powerful attractions.

Nobody knows how long and deep the current recession will be, and projections should always be prefaced with uncertainty.

Those with long memories, however, will remember other downturns and what subsequently happened.

In each case, rapid expansion eventually resumed.

Queenstown Lakes has one advantage over other districts in the large number of houses unoccupied for much of the year.

While facilities still need the capacity to cope with the busiest times when many of them will be occupied, as around New Year, such properties help subsidise the permanent residents by making lighter demands on landfills and rubbish collections, on libraries and on some other council services.

On the other hand, and more significantly, non-rate paying visitors, who are the area's lifeblood, accentuate problems like parking, wear and tear on roads and peak demands on services.

They are targeted in part through higher accommodation rates.

The Mayor, Clive Geddes, has said other measures to extract more income from them are not feasible.

Every council confronts rejecting or postponing valuable projects and curtailing beneficial expenditure because of spending pressures.

Making those decisions is at the heart of the role of councillors and draws on all their wisdom and skill.

As Queenstown Lakes and its ratepayers go through this process again this year they can, at least, know that the the strains of growth are much to be preferred to the pressures caused by stagnation or a spiral of decline.

 

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