‘Back to basics’ approach likely for Enhanced Annual Plan

Hitting pause on major projects and taking a ‘back to basics’ approach is being promoted in Waipā District Council’s draft Enhanced Annual Plan, which will be considered by its Strategic Planning and Policy Committee on Tuesday.

The Council this week formally­­­ approved a move to a 12-month plan for the 2024/25 year, deferring its long term plan to next year. This followed a Government requirement for local authorities to include waters for the 10 years of the plan.

Chief Executive Garry Dyet said once the budgets were reworked to include three waters it meant ‘going back to the drawing board’ as there were a number of financial planning challenges.

“One of those is because we are a growth council. We had to account for three waters infrastructure in all of our growth cells for the longer term, and that had a significant impact on our debt levels and debt metrics,” he said.

While the draft 12-month plan still has a significant capital expenditure programme with $158 million earmarked, this is primarily focussed on core activities such as wastewater ($47.1 million), roads and footpaths ($47 million), stormwater ($25 million) and water ($21 million).

Community Projects such as Te Ara Wai and the Cambridge Library are recommended to be paused. The proposed average rates increase of 14.8 percent has remained the same as originally forecast as water related costs had already been included in the first year of the draft 10 year plan.

“We really are facing the perfect storm,” said Mr Dyet. “With increases in inflation, interest rates and depreciation costs sitting at around 16 percent, and being completely out of our control, we’ve had to have many attempts to cut the cloth to fit,” he said. “We’ve used reserve funding to try and reduce the impact on the community.”

The extra time between now and adopting a Long Term Plan in the 2025/26 year was expected to bring more clarity on the Government’s plan for the future of water service delivery, and potentially the further development of other funding and finance options, Dyet said.

It was forecast that the Council’s level of debt would be at $398.5 million at the end of the 2024/25 financial year. More than half of that would be growth related.

The Government is expecting to 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.

Consultation with the community will be held in April.