Cambridge News column March 2024: LTP deferral decision has benefits

Community representatives at the Council's long term planning workshops.

Waikato District Council has decided to defer its next Long Term Plan (LTP) until 2025. 

Using the opportunity offered under legislation repealing the previous Government’s Three Waters programme, the Council will switch to an ‘enhanced Annual Plan’ for public consultation for the 2024/25 financial year, followed by a nine-year LTP from 2025-2034.

A key consideration in this decision is to gain better certainty around the Government’s next steps to implement its ‘Local Water Done Well’ programme. This will roll out in two Bills later this year, with the second one - providing for new types of structural and financing tools - not expected to be introduced to Parliament until December.

Nevertheless, after three open workshops held this year on long term planning to date, a view has already emerged that general rates may need to increase by 13-14% in the new financial year, starting in July, in order to cope with a range of increased costs.

Cost challenges include inflation, interest rates, increasing compliance requirements, and increasing asset maintenance costs, among others. While the last LTP planned for inflations levels of 2-3%, in practice costs for the Council have inflated at least 17% over the past 3 years, with the current cost of civil construction being 26% higher than three years ago.

In order to keep general rates to the level being discussed, the Council has had to find about $2m in operational efficiencies, and reduce expectations for our roading network, with a possible overall roading budget of $147m for the next three years which will afford only a small lift in resurfacing and rehabilitation work.

Targeted rates are set to rise for the same reasons, as well as to accommodate the new Government’s direction on Three Waters.  Rubbish sticker prices are also under review, for example.  They have not changed since 2017 when our waste management costs were $4.5m compared with $7.5m in 2022 and forward projections of costs rising to $11m by 2028. 

Adoption of a draft enhanced Annual Plan is expected in time for public consultation to open later this month and continue into April.

Deferral of the LTP until next year confers several other advantages including:

• More time to plan for a new era of water delivery after Watercare confirmed last week its withdrawal, as of June 2026, from a contract to operate the district’s water, wastewater and stormwater services. This is disappointing since the Watercare contract offered benefits in service delivery, capital project delivery and procurement – but it’s also timely for us to consider a range of options for water service delivery post-June 2026, whether that be in-house, a council-controlled organisation (CCO), or delivery by another authority or agency.

• Greater certainty around Waka Kotahi funding (expected to be confirmed in September). Waka Kotahi provides a 51% subsidy for our roading programme which uses about a third of our general rates income.

• Greater certainty for ratepayers on rating impacts when we consult on the LTP in 2025. A QV property revaluation currently underway is not due for delivery until May.

Crystal Beavis, Waikato District Councillor, Tamahere-Woodlands Ward

See the article as originally published in the Cambridge News here.