Waipā inches towards its borrowing limit

Waipā is inching towards its borrowing limit as the disctrict council hits pause on its Long Term Plan.

The council, on Tuesday, adopted a proposed work programme and draft budgets to consult with the community over part of its 2024/25 Enhanced Annual Plan.

There will be an average rates increase of 14.8% in the draft budget for the 2024/25 financial year.

At Tuesday’s extraordinary meeting, the

Strategic Policy and Planning committee was told there would be 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. This follows council decision last week to hit pause on its Long Term Plan in favour of a 12-month budget due to financial challenges including the reinclusion of three waters costs and the resulting uncertainty around funding.

Mayor Susan O’Regan said the council was in an unenviable position and it too had been affected by high inflation and interest costs.

As a growth council, it was required to pay for the infrastructure costs of three waters until an alternative delivery model was decided, she said.

“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.”

The Government has signalled 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.

O’Regan said move 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.