Feedback has now closed.

Thank you to those who submitted their feedback on the Draft 2024/25 Enhanced Annual Plan.

Next steps:

• Analysis of the feedback.
• Hearings and deliberations will be on Monday 20 and Tuesday 21 May. If you selected to present your submission verbally at a public council hearing we will be in touch with further details.

Our draft 2024/25 Enhanced Annual Plan details what our focus will be over the next 12 months. We need to respond to today’s challenges but keep our eye on the big picture for the future.

Like all businesses and households, we’ve been hit with high inflation and increased interest costs. For us as a council, there is an additional factor - the re-inclusion of the infrastructure costs for three waters until an alternative delivery model is decided upon. Then when you throw in the costs we bear on a temporary basis to meet the growth requirements from Central Government, the picture is a challenging one.

We are not alone. Many other councils are in a similar position, particularly the ones experiencing growth.

We need to be deliberate in our thinking as we plan for the future of our district, while being mindful of our financial restraints and the impact on our ratepaying community.

We know that an average proposed rates increase of 14.8 percent is unprecedented in Waipā but the costs we cannot control required a 16 percent increase alone. We’ve called on reserves funding to try and ease the impact as best we can.

In this plan, we’ve tried to strike a balance between meeting the cost of necessary renewals and maintenance and planning for the future. We want to hear from as many of you as possible about whether we have that balance right.

Please read through the details below, supporting documents and have your say. Your thoughts help us make informed decisions.

Where Council gets its revenue from

There are really only a few ways that Council can get revenue – rates, fees and charges, subsidies and grants, development contributions and investment returns.

We have a number of ways we charge rates.

A general rate which is based on the capital value of the property.

A uniform general charge which is a flat charge per property for particular services and/or activities and everyone pays the same amount, regardless of the value of your property.

A targeted rate which is used when a service or project is specific to a particular part of our district.

About the 14.8% proposed rates increase

Because of the way the rates are applied, not everyone pays the same. That is why when we talk about an average rates increase, it does not mean that will necessarily be the amount of increase for your property. It depends on where you live, the services you receive, and the value of your property.

When costs increase like we’ve seen recently with very high inflation and escalating interest rates, we are very limited in the way we can respond. Essentially, it means that we have to also increase rates and fees and charges to pay for the extra costs.

When you combine the increase in costs with our assets rising in value by $120 million, and the need for us to fund depreciation (to pay for replacement assets in the future), we need another 16.1 percent in revenue in 2024/25 to be able to meet those costs.

To try and reduce the impact on ratepayers, we have used $5.5 million of reserve funding. The average rates increase for the 2024/25 year is proposed to be 14.8 percent.

In year 4 of the 2021-31 Long Term Plan, we were projecting debt to sit at $318.5 million - $80 million less than what is now expected.

The key reasons for the increase are a reduction in other revenue such as development contributions received, and significant increases in the cost of the planned Capital Works Programme.

This pie chart outlines our debt picture.

At the end of the 2024/25 year, 57.8 percent of our debt is estimated to be growth-related. Growth-related three waters debt makes up 35 percent of the total debt.

A further 21.9 percent of our total debt has resulted from Council investing in our current three waters infrastructure to ensure it remains compliant and fit for purpose. As you can see, those things make up a big part of the debt equation.

This is why the reintroduction of waters to the draft Long Term Plan was such a gamechanger, and why a greater amount of time is required to work through the implications of this on our debt metrics, and in determining an approach to mitigate the impacts.

Despite the uncertainty of some issues, one thing is clear – growth is having a huge impact on Waipā. This will not change for some time yet.

By 2050, we’re expecting an additional 18,000 people to be living in our district, bringing our population to around 79,100. There will be an extra 10,400 more people in Cambridge, around 5,000 more people in Te Awamutu and Kihikihi. and another 2,600 people spread across our villages and rural areas. To house our new arrivals, we’ll need about 6,900 more homes.

Population growth, migration and other factors mean growth in Waipā is inevitable. Rather than ignore growth, or push back against it, we must manage it in the fairest way possible.

Growth-related debt

Catering for growth is costly.

Developers pay for growth infrastructure via development contributions. Since development contributions were introduced in Waipā, we’ve received $87 million from developers.

Although growth does pay for growth and its infrastructure needs, there may be delays between when Council builds the necessary infrastructure and when developers pay their development contributions. They pay when sections go to market.

This time-lag and infrastructure costs significantly impact Council debt levels, especially for high-growth councils like ours that are seeing slowdown based on the current economic climate.

The impact of three waters

Importantly, nearly 60 percent of our forecast debt relates to three waters. Like all other councils, we had budgeted for that waters debt to be off our books by 2026 because of legislation that was in place to change the way three waters is managed. In December 2023, that suddenly changed when the new coalition government clarified their intentions to repeal the legislation, leaving us with no option but to put the cost of three waters infrastructure back into our budgets.

Having three waters back on our books, when we did not expect it, has pushed us close to our debt limits, placed upon us by the organisation we borrow money from (the Local Government Funding Agency).

Due to our financial position we have taken a ‘back to basics’ approach to our proposed capital works programme. It is primarily focussed on maintaining our levels of service to our community, renewing our assets, and/or catering for growth.

We still have a big capital expenditure programme with over $158 million earmarked for core activities like wastewater ($47.1 million), roads and footpaths ($47.3 million), stormwater ($24.8 million) and water ($20.7 million). We can still look after the basics.

What we have paused

In reviewing the budgets, we have decided to pause work on some key projects until we draft and consult on the 2025-34 Long Term Plan early next year. They are:

• Te Ara Wai – a New Zealand Land Wars Museum planned for Te Awamutu
• A new Cambridge Library
• Cambridge Town Hall upgrades
• The Te Awamutu to Pirongia Cycleway
• Construction of new pensioner housing
• Sports fields improvements

What we are planning to do in 2024/25

• Undertaking earthquake strengthening and reinstating the office space and Te Awamutu Museum in Roche Street
• Continuing with the development of a Resource Recovery Centre, largely funded from the Ministry for the Environment’s Waste Levy funds
• Leamington Domain Masterplan implementation
• Completing the finishing touches to the Cambridge and Te Ara Rimu Kihikihi cycleway projects
• Upgrading the Alpha Street Water Treatment Plant in Cambridge

No longer funding or temporarily reducing the amount spent on some planned renewals.

This includes in cemeteries, libraries, parks and reserves, property, public toilets, community halls, roading and footpaths, water and wastewater.

Reducing discretionary and grants funding

• Saving $50,000 by no longer funding Te Waka: Waikato’s Regional Economic Development Agency
• Maintaining the level of funding to local community organisations through grants, with a slight increase of $1,080 to a total of $11,080 for the Waipā Mountain Bike Club
• Reducing Council discretionary grant funding by $216,800. This includes reducing funding to each of the two community boards from $49,600 to $20,000, reducing the Pirongia Ward committee grant funding from $27,600 to $10,000, halving the District Promotion Fund from $150,000 to $75,000, and halving the Heritage Fund amount from $75,000 to $35,000
• No longer providing a Community Events Fund
• No longer funding the Cambridge and Te Awamutu iSites

• Reducing funding to Hamilton Waikato Tourism from $183,379 to $146,703

Delaying the development of some planned growth cells

View the Draft 2024/25 Enhanced Annual Plan Consultation document here.

View the full Draft 2024/25 Enhanced Annual Plan Groups of Activities and Financials Section here.

The Cambridge Water Tower is located on the greenbelt reserve on Hamilton Road, next to the Resthaven Retirement Village. The tower was constructed in 1902 when the town's population was around 1,000 people and stands 19.5 m above ground.

The water tower provided water to Cambridge from 1902 - 1926 but stopped being used as the springs it drew water from were being polluted.

Since then, it has had no practical purpose however it has remained somewhat of a local icon to some of our community and a landmark and is registered as a Category 2 Heritage Building by Heritage New Zealand (HNZ) – Pouhere Taonga. The tower is also identified as a Category B heritage item in Council’s Operative District Plan (ODP), meaning it has regional and district wide significance.

An earthquake assessment in 2014 said the tower met 25 percent of national building standards (NBS). This means Council needs to make a decision on what to do with the tower – remove or restore.

There are two key options for the future of the water tower – remove or restore. Doing nothing is not an option due to the unsafe state the tower is in. Council did consider relocation but the process and costs involved means this option simply isn’t viable.

View the draft 2024/25 Enhanced Annual Plan Consultation document here.

View the full Draft 2024/25 Enhanced Annual Plan Groups of Activities and Financials Section here.