Council faces balancing act in development of Enhanced Annual Plan
Waipā District Council has today adopted a proposed work programme and draft budgets to consult with the community on as part of its 2024/25 Enhanced Annual Plan.
The Council made the decision last week to hit pause on its Long Term Plan in favour of a 12-month budget due to financial challenges presented after being required to reinclude three waters costs for the 10-year period, and the uncertainty around funding moving forward.
The Government has signalled that it will establish a framework and transitional arrangements for councils to self-determine future service delivery arrangements for three waters by mid-2024. A second wave of legislation will be introduced in December 2024 and enacted in mid-2025 that will provide for a range of structural and financing tools with regards to three waters.
Today’s extraordinary meeting of the Strategic Policy and Planning committee was told the draft budget for the 2024/25 financial year proposed an average rates increase of 14.8 percent, net of growth, and a $101.7 million increase in the Council’s debt position. It was estimated the closing debt at the end of the 2024/25 financial year would be $398.5 million.
Mayor Susan O’Regan said the Council was in an unenviable position. It too had been affected by high inflation and interest costs, and as a growth council there was a requirement to pay for the infrastructure costs of three waters until an alternative delivery model was decided.
“While growth does ultimately pay for growth, there can be a time lag between us providing the infrastructure and developers being able to pay. At the moment growth infrastructure costs make up more than half our debt, and we are starting to inch towards our borrowing limit,” she said.
Moving to an annual plan was made to ensure that elected members were as informed as possible about finance and funding options before committing to a longer term work programme.
“We have had to make some hard decisions to get to this point, given the increases in inflation, interest rates and depreciation are sitting at around 16 percent. We are proposing to use some reserve funding to give some relief to ratepayers, and we hope that we can gain a better understanding about the future financial landscape over the next 12 months,” O’Regan said.
“We have tried to strike a balance, and when we consult with our community in April, we are going to be asking if we’ve got that balance right.”
