High growth, low debt – Waipā is in an unexpected sweet spot that gives the lie to early Covid forecasts.
Mayor Jim Mylchreest says he’s thankful the economists’ predictions haven’t come to fruition in the district.
“The growth, both in subdivisions and households, and industrial growth, is far exceeding expectations.”
Infometrics research shows Cambridge and Waipā have held up well against Covid, with a report recording the district with a modest 0.5 per cent increase in GDP for the 12 months to December 2020, well above the national 2.6 per cent decrease.
Mylchreest acknowledges the downside around affordability, but says the council is flat out keeping up with the development coming its way.
Industrial development is pronounced around Hautapu and the airport, and Mylchreest says Te Awamutu is also picking up with a new Bond Road development starting, and also some redevelopment in the town.
Major earthworks are also underway on the western outskirts of Cambridge in growth cells dubbed C2 and C3.
Mylchreest says Waipā’s policy is that growth pays for growth, with developers footing the bill for much of the infrastructure work around the three waters, and the costs then affecting section prices.
“And then of course, as we get increasing capital value in the district, there’s more ratepayers to pay for what needs to be done.”
That sees Waipā proposing what it says are some of the lowest rates rises in the country over the next 10 years, with the long-term plan proposing increases of 4.2 percent and 4.1 percent in the first two years, averaging out at 1.8 percent over the decade.
Mylchreest says they are helped by going into the growth period with historically low levels of debt, following more than a decade of paying it down. There will be a “massive increase” in borrowing, which will be at low interest rates.
“In the last 10 year plan, we were talking about a debt level of about $13 million. And now with all of the infrastructure – and a lot of it will be funded by that growth – we’re talking about a peak debt over our 10 year plan of about $340 million.”
Mylchreest says that still gives them about $100 million in “freeboard”.
Cambridge Chamber of Commerce chief executive Kelly Bouzaid, however, sounds a note of caution.
She says on the surface the town and district are doing “incredibly well”. But she warns that fatigue remains a factor for some Cambridge businesses after a year of Covid. Business continuity issues, the ability to find skilled and unskilled labour and the challenge of rebuilding remain real challenges, and economic recovery should remain part of the conversation, she says.
“There’s a lot more under that surface.”
Part of her issue is a lack of Cambridge-specific statistics to know exactly how the town is travelling.
She has a foot traffic count for the town, and would like similar levels of detail for other indicators as well, and says businesses are also looking for the data.
As someone close to the business community, she says the uncertainty when the region went into level two worried people.
“There’s also still a high level of fatigue. And you know, those choices: Do we hire someone? Don’t we hire someone? What do we do?
“And then you see the braver people making those decisions and flying, but they’re in the IT and construction sector.”
It is tougher in some industries than others, she says, with hospitality definitely struggling with a lack of staff.
On the positive side, she says the “totally locally” culture is embedded, with people spending more, including a welcome increase in spend from Hamiltonians.
Local body reforms
With local authorities facing upcoming change over the provision of the three waters and a government-announced review of the local body structure, Mylchreest has strong views on keeping decision making close to communities.
“I’m a great supporter of decentralisation, I suppose, rather than centralisation – getting the services delivered close to the population that they’re supposed to be servicing.
“There’s some opportunities for councils to become more responsive to their communities. So from that perspective, I think there’s some great opportunities there.
“But if the intention for the review is to reduce the number of local government entities, take more services away from rural and provincial New Zealand, then I’m dead against it.
“We just need to be open minded and try and influence the direction that government is taking.”
The difficulties will come if the Government fails to take note of what local government is saying, and is instead driven by bureaucrats in Wellington, “who probably don’t really understand rural and provincial New Zealand”.
Waipā is in a good position when it comes to the three waters. “We’ve invested heavily in infrastructure, we’ve been funding depreciation and keeping up with our renewals.”
There is still a lack of detail coming out of central government, and Mylchreest’s question is how areas struggling with their infrastructure will be supported.
“Our responsibility as a council is looking after our ratepayers, and I don’t want to see our ratepayers
paying twice.
“If the government stepped in and said, ‘Look, we’re going to be helping out these other localities,’ well then I’m pretty relaxed about it. But if there’s going to be cross subsidisation across the territorial boundaries, then it’s a question we’re going to have to ask the community, are they prepared to be into it?”
Mylchreest says he goes along with some of Waikato Chamber of Commerce chief executive Don Good’s comments around the difficulties posed to business by different standards and development requirements across local body areas.
“Making it easier for businesses is obviously something that we should be looking at collectively.
“But local bodies are not just set up for businesses, they’re set up for the community as well. So it’s always a balancing act.
“You know, what are the community values that people want to see happening in their own local area, as opposed to just being purely focused on business?”
