Looking after the dollars

Published: 6 August 2024

Last Updated: 25 September 2024

By Mayor Kirsten Wise

Sustainability is a word that is thrown about a lot. It can mean different things to different people. Here at Council, we have been thinking about it in the context of our finances. What does it mean to be a financially sustainable council?

Ultimately, it means being a financially sustainable community. Well over half of all our funding comes from our ratepayers, with another significant portion from user-pays fees and charges, also mostly paid by our residents and local businesses.

We’re all feeling the pressure from a long period of high inflation. With that in mind, how can we ensure our community can sustain the funding needed to deliver the services and activities they expect from us?

Obviously, we won’t see different results if we keep doing things the same way. Our recently adopted Three-Year Plan activates new ideas to reduce future rates increases, setting our city on the path to financial sustainability. Our thinking revolves around applying a commercial lens to various services and activities that we’ve previously not considered in this way.

We’ve set the wheels in motion to create a Council-Controlled Trading Organisation. Our objective in setting up the CCTO is to create an inter-generational investment portfolio that will benefit current and future generations of Napier residents. It will manage our investment assets, such as Parklands property development and our leasehold land portfolio, in a way that maximises their financial return.

Our tourism facilities help Napier to be a great visitor destination and a city that provides inviting spaces and places for residents. Last year we carefully considered whether any could operate as commercial businesses. We made the decision that Ocean Spa, Napier Conferences & Events and Kennedy Park Resort will now focus on operating commercially.

Except for Ocean Spa, the necessary increase in fees and charges to help achieve this will not impact locals, because a good proportion of these facilities’ customers are visitors and out-of-town businesses. As part of this transition, we are investigating a locals’ discount for Ocean Spa so our residents can continue to enjoy this facility at a cheaper rate.

All these initiatives will contribute to lower rates rises in the future. The more we do now to get our house in order, invest well, and plan financially for the known and unknown, the brighter our city’s financial future will look. We will eventually have extra income to fund more services and activities our residents want and need, without depending as much on rates. We’ll build up our financial resilience to unexpected events, such as what we’ve experienced with Cyclone Gabrielle, the 2020 flood, and Covid-19 lockdowns. By now, we all know very well that emergencies aren’t hypothetical events that never happen.

These changes will not bring about overnight success in our objectives. We are thinking about this from an inter-generational perspective. Our goal is to ensure our grandchildren and their children live in a city that has affordable rates, and services and facilities to be immensely proud of. There is no better time to start on that journey than now.

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