Timaru’s Theatre Royal: What could it cost ratepayers?
Friday, 16 February 2024
Timaru councillors have been told the annual operating cost of the Theatre Royal will cost ratepayers $187.44 per rating unit by 2027.
A report in October 2022 put the annual cost at about $17 per ratepayer, but council consultant says that did not include operating costs.
Councillor Stacey Scott says most recent estimates higher than $57.1m agreed budget and suggests they could be as high as $65-70m.
The annual cost to ratepayers of upgrading Timaru’s Theatre Royal will be more than 10 times the amount they were warned to expect 18 months ago.
However, the most recent estimates suggest the project could cost a lot more than the $57 million previously estimated.
New figures were presented to Timaru District councillors during a Long-term Plan (LTP) workshop at the council on Wednesday.
Calculations based on raw figures from budget models prepared for the workshop show the average cost per rating unit (based on 22,500 rating units) to cover operating costs for the project would increase each year from $11.89 in 2024 to $187.44 by 2027.
The annual cost to ratepayers in 2025 would be $15.86 each. In 2026, that would increase to $119.42.
Council chief executive Nigel Trainor, who started in the role in December, said the modelling was based on depreciation over 50 years and a project cost of $57m.
There was plenty of robust discussion about the project, which mainly centred on the cost – with one councillor suggesting the latest costings could result in the project hitting the $70m mark.
A report tabled at a council meeting in October 2022 put the annual cost of the theatre redevelopment at about $17 per residential ratepayer through to 2031.
At the time, it came with a warning that those figures included repayment after that year because debt was to be drawn over a 25-year period. The cost of the project was then expected to be up to $57.1m.
When councillor Allan Booth questioned the increase, LTP project lead Vincie Billante explained the figures released in 2022 did not include the operating costs of the project.
A discussion about the impact of deferring the theatre project and how it might affect the Government’s contribution of $11.6m led councillors to ask whether that sum would have to be paid back.
Project manager Nicole Timney said the council had drawn down $4.8m, and there was a further $5.5m available should it get to the construction phase. She said she was aware of other organisations having to pay back the funding as a result of projects not going ahead.
Councillor Stu Piddington asked whether the council should send a letter to clarify whether the money would have to be repaid if the project was not completed.
Mayor Nigel Bowen suggested the councillors should take care not to create a narrative for not doing the project.
“It does feel, Cr Piddington, that that’s the line you’re pushing. And I would say at this point, you’re almost conflicting yourself out of that conversation.”
Piddington said he totally disagreed with Bowen’s suggestion.
“What I am trying to get is an accurate figure so we can tell the ratepayers what this thing is going to cost.”
Bowen said he wanted to highlight that the museum, theatre and stadium projects made up 10% of the council’s capital programme.
“We …. bicker and fight against each other on 10% of the capital programme. Whether you love or hate some of these projects, that is the reality of what we do.
“And we divide the community as we do it. We just fuel division. I think it’s unhelpful.”
Booth said the project was going to cost three times the amount of CBay, and the cost was now “out of proportion”.
“We can do something better, and we will find a solution. But this is not the solution to keep driving down this spiral into a deep hole.
“Everyone I’m talking to, they’re going, ‘What the hell are you doing?’’’
He said he did not believe the council had ever consulted on the option of “doing nothing” regarding the theatre.
“The theatre needs to stop right now, we could have saved ourselves $2.5m if we’d actually done something prior to Christmas.”
Bowen responded, asking Booth: “If you received other info, would you have a more balanced view? Would you be open? Or is that your final view?”
Booth again referred to the costs, saying: “It has gone from $8.9m to $60m. It’s a theatre.”
Asked again, by Bowen, whether he would change his mind, Booth said he was still “thinking about it all” and added: “I’m telling you what I’m seeing. We’ve never actually … consulted properly.’’
Councillor Stacey Scott said she believed the next “stop/go” meeting on the future of the theatre should come next month when the full detailed costs would be presented.
“[At] our last presentation, it wasn’t $57.1m … We are value-engineering it at the moment … so we know it wasn’t that. We’re trying to bring it back in.
“If we can’t achieve it and it sits at $65m to $70m, that is the decision moment.”
Bowen replied: “One hundred per cent, that’s the decision time.”
Billante explained that the modelling was based on projects the council had already decided on “through resolution”.
“You can revoke a resolution – there is a process to go through to do that. So you need to make it really clear.”
She said if the council was looking to revoke a decision, that could be included in the plan but warned that it was “not going to improve a lot of things financially”.
Councillors were also given the operating costs of other council facilities as a comparison.
Those showed that the costs for operating Aorangi Stadium could be broken down to $3.58 per rating unit in 2024, increasing to $9.82 in 2025, $32.12 in 2026, and $72.39 in 2027.
The district’s swimming pools cost ratepayers significantly more. In 2024, the cost per rating unit was $165.74 – an amount that would increase significantly in the following three years.
The council’s chief financial officer, Andrea Rankin, said this was because other departments had been subsidising the operating costs in the past, but that would no longer be the case.
In 2025, the cost to each rating unit would be $309.94. In 2026, that would increase slightly to $313.68 and again in 2027 to $317.23.
The district’s libraries were also included and show a cost per rating unit of $152.38 in 2024, $224.82 in 2025, $231.14 in 2026 and $237.70 in 2027.