New Plymouth residents are being warned to expect service cuts as the district reels from a decline in revenues post Covid-19.
Neil Holdom said despite an expected dive in council income over the next 18 to 24 months, essential services will be safe. Photo: RNZ / Robin Martin
Mayor Neil Holdom said council venues usually generated $6 million in revenue annually, while the now mothballed airport contributed $5m and its property portfolio $4.5m.
He said that income was expected to take a dive over the next 18 to 24 months or so as was revenue from the more than 1600 consents the council issued each year.
"The impact of this pandemic has been significant across the country and certainly those impacts are being felt in Taranaki.
"So we are talking millions of dollars of reduced revenue for New Plymouth district and I suspect peer councils around the country will have similar numbers."
Holdom said essential services would be safe.
"We are looking at some operational savings we could make and it may be we have to reduce levels of service in some discretionary areas of council over the next 12 months to cut our cloth to fit."
Holdom said council officers had been asked to go away and prepare a report on where savings could be made and he hoped to have that in front of council in the next two to three weeks.
"I can't pre-empt what they are going to come back with but what we've said is go away and have a look at what we need to do and what we want to do and come back with a report and I don't think it would be fair on them to pre-empt that."
On the upside, the council still had $273m in its Perpetual Growth Fund income from which was used to offset rates increases.
Holdom also said ratepayers could also expect some relief with the planned for 6.4 percent rates increase now difficult to justify.
"It's our view that it wouldn't be prudent to have a 6.4 percent rates increase on an economy that is facing a bigger downturn than in the Global Financial Crisis and so we are looking at how much we can reduce that."
Holdom said the council was working with government, iwi and businesses on a 'Get Us On Our Feet Plan'.
"Local government needs to partner with central government to go out and invest in things to get people working so we are in conversations as a region and with central government about what it is we can do as soon as the lockdown comes off to get people working and quickly."
Holdom said that could mean identifying local work programmes to generate economic activity which might include New Plymouth's water network or roading and cycle ways which could quickly inject money into the local contracting sector.
The council might have to borrow to achieve this, he said.
"Given our strong balance sheet, one option we are considering is to borrow and spend on our core infrastructure, knowing this work has to be done, and will amplify any government initiative to kick-start our regional economy."
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