Rates neutrality of project queried.

Both the University and the City Council have been at pains to point out over and over that  the ratepayers will not have to pay for the proposed music building.  Let us examine that proposition a little more closely.  No doubt it is true that the university will repay the costs over time through its lease payments and to that extent, it will be rates neutral.  But if the Council is to be responsible for  borrowing the money and developing and owning the building through one of its companies, then it will need to seek the necessary resource consents.  The choice of this site  rather than at Ilam will, at the very least, involve the appointment of a Commissioner to hear the resource consents.  This will be a cost to the ratepayer.  If an Environment Court hearing becomes necessary, as seems certain given the depth of public opposition to the scheme,  the Council will inevitably be a party.  Here the costs could run into millions of dollars.  Will the lease agreement with the University provide for the recovery of these costs? All public statements have been silent on this issue.  If these costs are to be covered by the Council, then the ratepayer will be contributing  to the costs despite all assertions to the contrary.  If the University has agreed to cover the Council for any resource management expenses then it is surely acting in a fiscally irresponsible way with scarce tertiary funding resources by building in a location where resource management battles are inevitable.

That does not look good for the university when it has recently announced that undergraduate fees will rise by 5% in 2010 and student service fees will rise to $600 per student.

The proposal will also impact on ratepayers in another way.  Any borrowing undertaken by the Council for this project will have an opportunity cost because no institution has an unlimited capacity to borrow.  As a consequence borrowing for some other project of benefit to the community will simply not happen or will need to be funded directly from rates.  The Council has only just been through its long term council community plan hearing process which is designed to allow communities to contribute to decisions on the prioritization of spending. This project was not included.