Whakatāne District Council has been grappling with the reality of significant cost increases and what these will mean for the cost of Council services and facilities in the coming years.
Last week, elected council representatives were presented with some early funding scenarios for Council’s work programme for the next 10 years.
Mayor Dr Victor Luca says the financial landscape is now vastly different from what we were facing three years ago, and in fact, anything we’ve seen in recent history.
“Macroeconomic conditions have changed dramatically and as a result we have a number of hefty challenges to overcome and some really tough decisions to make.
“We’ve been signalling this since our previous annual budget adjustment and in several of my Mayoral columns in our local paper, and the funding reality we’re facing is quite stark,” he says.
Unprecedented geopolitical tensions are, of course, not helping the situation either.
“We need to address the funding gap left by several factors including record-high cost escalations on multiple fronts, high interest rates and rising compliance and insurance costs. Alongside these, we’ve worked in previous years to keep rates at an affordable level and annual rates increases to a minimum in response to the rising cost of living.
“This has put us into a deficit that we now need to balance, and it’s important that we do this in a way that is financially prudent, while recognising that rates affordability is also a crucial factor for many members of our community. This is something that is more easily said than done.”
Mayor Luca stresses how important it is to provide the services people need and expect and take care of the facilities and assets of our community. However, he also admits that some activities might become too expensive and therefore some cost cutting may be unavoidable.
“The lion’s share of the work we do as a Council is in our infrastructure and services space and especially critical infrastructure — without these, life would be very difficult. That’s things like the roading network, waste collection and our drinking water, wastewater, and stormwater services.
“Chip seal and bitumen costs have gone up more than 50 percent, and concrete has gone up 100 percent in the past two years. Given what we spend on roading and footpaths, these cost escalations impact Council greatly.”
Mayor Luca emphasises these challenges are not unique to the Whakatāne District and mirror the issues faced by councils right across New Zealand and across the ditch in Australia.
“We’re committed to understanding the requirements to effectively run the district’s facilities and services, while acknowledging the current constraints on resources.”
Council's strategy to address these financial challenges will become clearer when the first draft of the 2024-34 Long Term Plan budget is developed. Mayor Luca constantly highlights the importance of listening to the community throughout this process to gather their perspectives, insights and concerns and has made a point of keeping his ear very close to the ground.
Council will continue to work on the draft proposed Long Term Plan 2024-34 and will seek feedback on this through a formal consultation process beginning in March 2024. Several opportunities will be available for people to have their say, and for Council elected members to consider as they work to finalise the plan by 30 June 2024.