We have continued to invest in our infrastructure, by way of upgrades, renewals, replacements and new developments, to ensure that we have sustainable and resilient infrastructure. Here is a snapshot of our capital investment and operating expenditure for the past three years.

For decades Council has been successful in managing finances prudently, meaning that we could keep rates increases to a minimum. However, the world has shifted since our last long term plan and our district is facing some really big challenges.

Even if we closed every park, library and sportsground, and cancelled all our economic and social development activities, the savings from these alone would not be enough to offset the investment required.

Three waters and increasing Government standards

Our drinking water, wastewater and stormwater services (three waters services) are staying in-house for the time being, following the repeal of legislation under the previous government, meaning that Council is must include three waters in our Long Term Plan.

Council has historically spent $84.3M over the last 10 years on three waters operations, and $81.5M over 10 years on infrastructure investment. The transition costs associated with bringing three waters operations in house from 1 July 2023, as well as the ever-increasing drinking water standards we must meet, has resulted in higher costs of operating and providing services and greater investment in three waters infrastructure. 

We are budgeting $328.9M over 10 years for three waters operations and $282.7M over 10 years for three waters infrastructure investment.

In addition, there has been two years of deficits caused by higher costs of operation and transition that have to be funded by the three waters activity.

Debt capacity

While Council can borrow to pay for our infrastructure renewals, increases in levels of service and growth, we also need to be mindful of our debt capacity.  Through the Local Government Funding Agency, Council could borrow net debt of up to 175% of our revenue.  With the required three waters investment in this LTP Council would have breached our debt limits. 

Council has decided that achieving a credit rating that will increase our debt capacity is a prudent action when combined with the proposed significant rates increase. This will mean we can borrow up to 280% of our net revenue through the Local Government Funding Agency.

We have set ourselves a limit that net debt will not exceed more than 280% of annual revenue. This limit is assuming we obtain a credit rating by 30 June 2024.

Getting used to higher rates increases

Although Council has historically been successful in holding rates at low levels, we can’t put our hands on our hearts and say that these rates impacts are temporary.

The things that led us to this point will not be resolved easily. The funding system we are using is not working and the need for investment is huge. As cost pressures increased, the unsustainable nature of funding three waters infrastructure became apparent.

However, we can say that staff and Elected Members will lobby central government for greater support and align what communities want and need to the resources we have available to deliver them.

Investment in infrastructure

Many of our assets are getting near the end of their lifespan, meaning we require major investment to bring the assets up to standard or replace them.

Cost escalations

Even before COVID-19 tipped the world on its head, we were facing big increases in the cost of providing our services, and that hasn’t changed. Like many other Councils, we are facing escalations in the cost of investing in our infrastructure and providing our services well in excess of what was expected in our previous planning cycles.