Council faces tight three year plan

From Mayor Alex Walker

Many of us are planning for the holiday season right now: making a list of work to be done before a much-needed break, finding the perfect present for that difficult-to-buy-for relative, shopping for Christmas dinner ingredients – all while balancing the budget. And I am guessing that you are finding what I am – that the budget is not going nearly far enough!

Planning and budgeting is at the top of council’s agenda too. Our Three Year Plan is a large piece of work that kicked off for councillors last week.

Normally we’d be working on a Ten Year Plan by now, but cyclone-affected councils have been given special legislation by the Government to instead focus on the next, crucial three years of recovery for this planning round.

Since our last Long Term (Ten Year) Plan was written in 2021, the world has changed. We’ve entered a period of significant social, economic, and political change and uncertainty.

New Zealand households and businesses face rising costs, whether they are at the supermarket, the service station, mortgages, or employing staff. This is on top of the most significant disaster this district has faced for many decades.

In the same way, councils are facing very high costs and inflation pressures. Insurance, borrowing, and construction costs have rocketed. There is uncertainty around the coalition Government’s proposed repeals and reforms, and where it will take local government.

There is the significant impact of Cyclone Gabrielle continuing to make itself felt, not least through our damaged roading network, and an ongoing wait for central government confirmation that it will meet at least part of the massive repair bill.

Quite simply, we are paying more to receive less. And there is more to do than ever.

Last Thursday, we received the latest formal council briefing on where the numbers in the new Three Year Plan - in this crazy world of cyclone recovery and economic chaos - are going to need to go.

It’s very big, but not yet complete, and we cannot focus on the parts we can’t control, such as inflation, interest rates and insurance, but on how we navigate with the levers that we can control.

With that in mind, as we put together our budgets for the next three years, we have two clear options ahead of us, and councillors have provided guidance to staff on them.

We can choose to make no substantial reductions to council services, while prioritising roading and Three Waters work.

Alternatively, we could take a more restrained, longer-term approach which would initially reduce services but gradually restore them over five years’ time as affordability allows.

This will need to be a community-wide decision early in 2024. No matter which we choose it is going to be hard. And no matter which we choose we are going to be paying more, to receive less.

The irony of this is not lost on your elected councillors or council staff.

But we are committed to Project Thrive’s strategic vision for great community-led outcomes, and our absolute conviction that we will make our way through this difficult period together and emerge stronger.

Barring a total review by central government of how local government is funded, as councils have been requesting for some time, either of the options will inevitably mean higher rates.

At last week’s council meeting, councillors suggested many innovative ways in which we could investigate savings. Even though those savings may be small in comparison with our massive roading bill or the cost of renewing our waters infrastructure, we must continue to keep a close eye on the costs that we can control while we assess our overall options.

What does success look like at the other end of this Three Year Plan? It has to be transformational and courageous.

A sustainable, locally led Hawke’s Bay Three Waters solution – developed since 2019, and given the green light by the new Government – would lift a huge amount of uncertainty and cost. And a focus on transformation of our local roading operations to put the focus back on great local direction and solutions.

It’s crucial that our decisions will prepare us for future events, because they will come. We’ll battle difficult headwinds again. Even though we don’t know exactly what form those headwinds will take, it’s vital that we replenish the emergency funds that we needed to draw from after Cyclone Gabrielle. 

It’s also important that we continue to review projects we’ve postponed now so ratepayers are spared undue immediate cost – for example, the replacement of the storm-damaged Tukituki Swingbridge.

This plan will be our budget and roadmap for the next three years. Our aim is to strike the best balance for everyone in our district, the people who live here now and those who will live here in years to come.

We can’t go backwards.

We must look after what we’ve got and maintain what makes Central Hawke’s Bay such a great place to live, while still planning for the future.

19 December 2023

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