Why is this LTP so challenging?

    • Porirua City, like councils across the country, is experiencing a sharp increase in costs to deliver services and projects. 
    • Increases in the cost of energy, water supply, insurance, and interest rates all mean that just providing our core services, like rubbish, roading, facilities and pipes is costing more.
    • Another challenge for this LTP is the change in direction by central government on the ownership and delivery of three waters. Retaining water puts significant pressure on the ability of Council to maintain its debt headroom (or r so that it does not breach the cash revenue limit set by the New Zealand Local Government Funding Agency. 
    • You’ll recall during the Annual Plan 2023/24; we deferred some hard decisions and limited rate increases by taking on additional debt – that meant the deferred costs would need to be addressed through this LTP.
    • All of this means we need to cut costs, defer some of our less urgent infrastructure projects and increase rates.

    Why are our rates so high?

    All property owners pay rates, including government departments and Kāinga Ora. With a population of approximately 62,800 people and only around 20,400 rateable properties, we have more people per household than the national average. Porirua also has fewer sources of income, like airports, trusts, ports, and property portfolios to offset the cost to ratepayers. It costs a lot to run the services Council provides and unfortunately, we are not immune to the cost increases to deliver those services.

    What is Council doing to save money?

    We’ve reviewed opportunities for increased revenue and for savings in how we deliver our services and projects. We are looking to reduce costs by around $1million and increase revenue by approximately $750k. This is in addition to the $3 million cost reductions that we’ve made in the current financial year. These will continue throughout the LTP and have been factored into the indicative rates. Cost reductions generally require significant reductions in the levels of service we provide the community.

    How many people are currently employed by Council?

    As published in the 2023 Annual Report, we have a total of 432 employees, or 380 FTEs.

    Why don’t you get rid of staff to save costs?

    Our staffing levels are what is required to run the city and provide our current levels of service. To deliver a 5% rates reduction would require a reduction in approximately 70 staff. This is equivalent to approximately 17% of the current workforce and would significantly impact city services – it could mean closing entire community facilities like the Te Rauparaha Arena and the Central Library.

    Why don’t we just have fewer councillors to save costs?

    The number of councillors is determined by the Representation Review. A remuneration pool (one pot of money) for councillors is set by the Remuneration Authority. It doesn’t matter how many councillors we have; the pot of money remains the same.  It is the Council’s responsibility to decide how to allocate the money between elected members, with the minimum amount being $42,136. The Remuneration Authority also directly sets the pay of the Mayor, which is $151,954 currently.

    What does having a balanced budget mean?

    Having a balanced budget means Council’s spending matches its income and so doesn’t create a deficit that needs to be funded by future generations.

    What is Council doing about climate related hazards?

    Porirua City is in Phase 1 of a project to prepare our council and our city for the impacts of climate change.

    Phase 1 of the programme aims to understand the impacts of climate hazards on council-owned assets like roads, parks, property, and infrastructure.

    We are using our asset data overlayed with hazard information from our District Plan. Hazard information includes coastal erosion and inundation with a 1:100 year event now and with 1m sea level rise, and flooding with a 20% increase in volume and intensity.

    This information will help us to understand the cost of the challenge we are facing, and think about some possible adaptation options to address the risk. We will then use this information to start adaptation planning with our communities in the areas most vulnerable to climate hazards in Phase 3 of the programme.