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Council Debt Will Be Kept Manageable

Media release
24 September 2003

Council Debt Will Be Kept Manageable

Manukau mayor Sir Barry Curtis says speculation that the Council’s debt will rise to around $400 million within ten years is incorrect, and he is certain it will not reach anything like that figure.

Currently the debt is $107.6 million.

Sir Barry says, “Such a level of debt would be unacceptable, full stop. We simply can’t afford everything we might want to do. We have to be realistic and the figure being quoted was raised as part of a long term crystal-ball gazing project.

“It was only an assessment of the total costs if everything that could be done was actually done, which is not going to happen. We have to cut our coat according to our cloth.

“Manukau is a growing city and the Council needs to provide essentials such as new roads, drainage, water supply and sewage treatment and community facilities to cope with the growing population. Communities are demanding the best possible services and it’s our civic responsibility to build quality assets.

“We also have to maintain what we already have. Roads need resealing and drains must be repaired every so often, which is expensive but unavoidable.

“Rates and other current income are not enough to meet the constantly rising costs. That’s why some borrowing is necessary and is standard practise to


build these community assets.

”It is important to remember that borrowing spreads the burden more fairly by distributing the costs of building infrastructure through future generations as well as the present generation. After all, future generations of residents will have the benefit of using assets such as roads and swimming pools and should contribute to the costs.

“But there are also other options - user charges, more joint ventures with the private sector, and seeking more government funding for certain projects. Every avenue must be explored.

“For example, the building of new swimming pool and leisure centres could be funded by the private sector, with the Council leasing the premises.

“That would mean we would not have to front up with 10 -15 million dollars for a new pool complex, which is a huge saving.

“Large one-off costs for roads and major community venues make heavy demands on our finances, let alone the operational costs which are substantial.

“Lateral thinking will be needed because we are facing more and more community demands, and higher and higher expectations. Environmental standards are rising and central government is handing more responsibility to councils but without any extra funding.”

The Council is currently reviewing all projects and programmes costing $1 million or over, in an effort to find savings and sources of funding other than debt, as part of an ongoing prioritisation programme.

It is also considering the possibility of a community development levy for each new section created by developers in the city to meet the costs which the newcomers will impose. The revenue raised would help pay for new facilities such as libraries and other community assets.

ENDS

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