Preparing the NPDC 2027 Long Term Plan - Part Two – How to Decide What to Include in the Next 10 years and Getting the Numbers Right

The 2027 Long Term Plan – Part Two – How to decide what to include in the next 10 years and getting the numbers right

Following on from the challenges our 2025 elected officials face with the next LTP, options, costs and getting the numbers right were covered in another workshop.

We have to be very clear with what is being discussed in these LTP workshops that these are POSSIBLE ways to reduce budgets and financial figures. They are estimates at this stage – not finalised figures. No options being discussed HAVE YET BEEN DECIDED.

These LTP workshops are working through a range of information and scenarios and the elected officials will decide what goes in to the LTP consultation document and then the community will give feedback on options they prefer when the consultation is open early next year.

All services are being reviewed, operational savings need to be found, projects need to be prioritised and Asset Management plans reviewed.

Asset management covers everything the NPDC owns. Each asset has an operational work list (running costs) and a capital worklist (maintenance & depreciation costs).

When the NPDC spends capital (on projects) they need an operating budget to go with the completed project. The day to day running, maintenance and depreciation costs need to go into the operating budget for the Council. The debt for each of the projects is also covered in the operating budget – or mostly with the NPDC in the last few terms - just the interest on the loans is in the operating budget.

It has been highlighted that there are challenges with asset management and operating budgets. Once one of the nice to have projects is completed it becomes an NPDC asset.

The NPDC has to ensure that the ongoing operating and maintenance costs associated with new assets are fully understood and affordable over the long term.

And over time, making sure they maintain sufficient investment in all existing assets so the assets the city has in place already, plus any new assets created from projects, is accounted for in the ongoing asset plan budgets for the city.

Currently the NPDC records around $65M p.a in depreciation of assets. That depreciation means the assets are getting older and are losing value and being affected by wear and tear. They need to be maintained in line with the wear and tear and loss of value.

This $65M figure is going to increase as additional assets are built. For a long term financially sustainable future the council needs to reach a position where the money invested to operate and maintain all the assets is broadly equal to the amount of depreciation claimed each year.

With the development of the draft 2027 LTP these issues are being tested as part of the asset management part of the planning.

We would comment that it is well past time for the NPDC to be getting on top of asset management and depreciation, which has not been managed well in more recent years.

• We are very pleased this area is being addressed.

The projects and programmes segment of one of the workshops had a slide advising there are 500 line items on the NPDC project list. These are from previous and current LTP’s.

• 500 project and programme items the NPDC is trying to manage.
• As any of these projects are completed, an asset, depreciation and operating budget is required where applicable.
• It is plainly obvious not all of this can continue.

Another issue the NPDC has going forward is the money that has been put in to reserve funds.

This is money to support future events which aren’t included in the long term plan. Things like timing differences with delivery of projects, unexpected financial pressures, asset related costs or funding requirements.  Reserve funds can also be used to smooth higher than usual rates increases in a particular year, or over a few years.

Previous LTP budgets allowed for $10M p.a to go into reserve funds. Over the last 10 years that would have put around $100M into the reserve funds (some of that will have been used from operating budgets over the last 10 years). We don’t have an exact figure of what has actually gone in to these funds, but there was debate in these workshops about the amount available not being exactly what was expected.

• With a 4% rates increase, building up the reserve funds again will be challenging.

The recent coalition government legislated for rates caps to be introduced in 2029 . A 4% rates cap will be mandatory, and with such a high level already borrowed, the NPDC won’t be able to borrow money to pay for what they can’t invoice out with rates.

The city also has some other key issues:

The Todd Pool – Kawaroa – is approaching it’s end of life and needs significant expenditure to keep it operating.

The New Plymouth Population Growth has dropped. We have spent significant money on a Waitara Spatial Plan and Bell Block Spatial Plan, to plan for growth – but the population is declining. In the next 10 years we are forecast to have 5,300 less people.

The cost of developing new subdivisions has got really expensive, which means buying the land to build a house also goes up. An example in this workshop was that a 10 lot subdivision costs the developer around $518k for the Council infrastructure fees – what is called Development Contribution Charges. The Developers go into significant debt to pay the council these fees to develop land.

• $518k just for the Council piece of the costs to subdivide 10 lots.

Developers are telling the NPDC these charges are too high and not sustainable, and it is starting to have an impact on lack of development in the city. There has been a 45.3% decline in development contributions.

Development Contribution income for the NPDC from new developments in 2026 were:

Projected                     $10M

Actually Collected       $3 - $4 M

• This is at least a $6M drop in projected income for the year.

We have to stop thinking like we are a great big city with lots of big city needs and get focussed on what are the really important things that keep this community functioning well, and what is affordable

This city has been living like there is no tomorrow – and tomorrow arrives in February/March 2027.

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 Three - Possible options, other new legislation, possible new debt, and, how is the money spent now.