Preparing the NPDC 2027 Long Term Plan – Part One – The Challenges

The 2027 Long Term Plan – Part One – The Challenges

For the elected officials we voted for last year, who campaigned to keep our rates down, to achieve just a 4% increase in rates in 2027, they need to trim around $20 million off the NPDC budget in next years’ Long Term Plan.

• That is around 10% of their current budget. This is a significant challenge.

The strategy of what many ratepayers would now call “the legacy of the spenders”, in the last few terms, had been to increase rates intake going forward, to cover increased costs over the last few years, and they had also budgeted additional rates to increase renewing and replacing assets in the coming years.

Around a $50 million increase in the budget over the next 10 years was needed to cover the plans the “legacy of spenders” has left the new team with. This would very roughly have worked out with an average 10% increase in rates for each ratepayer, each year, over the next 10 years.

• The majority of the elected officials in the 2025 election campaigned to keep rates down and are committed to those campaign promises.

• But significant savings and challenges are in front of the New Plymouth community to deliver even a 4% rates increase.

• And we know so many people are over having rates increases at all - they want rates to come down.

Many ratepayers watched in 2025 as decisions were made to pull activities in the Long Term Plan forward and start them ahead of schedule, or, to spend more on a project than what was in a budget.

One example of this is the Daylighting of the Huatoki Stream in the CBD. A project of around $10 million, was pulled forward from year seven of the current LTP – that project was not due to start until 2031.  

If this project had stayed in 2031 as people had approved in the 2024 LTP, then in 2027 the community could have been asked if they wanted to spend the $10 M in 2031 as planned, or mothball this to a time when it wouldn’t result in a huge increase in rates.

But now in 2026 we have elected officials who have heard loud and clear to stop spending like there is no tomorrow, and they are trying to manage debt levels and they are trying to stay within a fixed operating budget. They are also trying to stay within a rates increase of 4%.

There are some very, very tough decisions to be made when you will be consulted on with the Draft 2027 LTP.

We need people to get their head around the options that will be presented, to account for the roughly $50M that won’t be collected in rates increases in the next 10 years, as budgeted by the legacy spenders, and to achieve the roughly $20M reduction in budget that has to be found now to get to a rates increase of just 4% next year.

• The actual figures being talked about in the current Long Term Plan workshops are still a draft and a lot of work is still being done to understand the impact of reduction in costs across all NPDC activities. These workshops are just presenting information, no decisions have yet been made.

We have a number of issues now affecting our city:

• A declining oil and gas industry,
• Ongoing power supply cost increases coming our way, due to climate change initiatives from central government.
• GDP is down -0.7%,
• Residential Consents are down -9.0%,
• Non residential consents are down -45.3%  (that’s a large amount of non rates income not coming in to NPDC income streams from business development)
• House values are down -0.6%,
• Tourist guest nights are down -3.0%,
• Employment is down -1.6%
• Our population is expected to decrease over the next 10 years
• The NPDC IT systems are old and fragmented and urgently need upgrading.
• In late October $4.7M was needed for a GST error, and, 3 accounting write offs with  old projects – projects that related to previous Council terms. A recent council decision has been made to cover this with additional debt, which will be part of debt levels in the next LTP.

There was a plan discussed by the last Government Coalition for costs to be divided across all NZ Councils for Civil defence of $84M, and resource management of $900M, with these costs being proposed to be added to rates costs – across the country. A very rough figure is this could add $1.8 M to an NPDC operating expenditure project.

On top of that the NPDC is now very close to its “ceiling” on the amount of money it can borrow. They can only borrow up to 135% of the annual rates income. They are close to that figure because of all the “nice to have projects” that have been started over the last 10 years.

All of this information is definitely not positive – and is on the back of big spenders who weren’t worrying about if things weren’t always rosy.

• The NPDC has been presenting this information in these workshops so the community is aware of the challenges they face.

• And we are presenting this information so people are aware how important it is to get behind the Draft LTP next year and get involved. Next year is so important for people to have a say on what is important and affordable for this city, so we can all afford to live here but also be able to pay our rates during tough economic times.

Information was presented at one of these workshops from a survey of the community.

We wanted to mention for people who don’t have an issue with rates increases, we have been hearing from urban ratepayers for several years about difficulties in paying the increases in rates. This year, we have started hearing from businesses who are telling us they can’t keep up with the 20% to 35% increases they are now experiencing.

After listening to all these challenges in one of the workshops we watched a segment with survey results presented to Elected Officials. A question about trade-offs of rates increases with services provided.

Sometimes we find it hard to understand how information is presented by Council staff. 3 figures were presented from this survey.

This was the graph:

21% said Better services were OK even if rates increases were over 5%

40% said A 5% increase was OK to keep current services

38% said Reduce services to achieve lower rates.

The NPDC staff presented this information as 61% of people we’re happy with a 5% increase or more. This was presented as the majority ? We found this quite misleading.

• We would present this information as 78% of people said keep the rates increases under 5%.

• 78% of people want a rates cap.
• 21% don’t.

A section of a workshop covered - To Control Rates increases - and Control Debt Increases - There has to be trade offs to balance needs and the budget.

Just a reminder, again, the Long Term Plan process is the way the community gives permission to the NPDC to spend your rates income in the next 10 years.

If the community wants rates to be kept affordable going forward then people must get involved with the LTP consultation early next year.

Next up is LTP Part Two - How to decide what to include in the next 10 years and getting the numbers right.