Third stick in the spokes: Wellington City Council needs another $130m in cuts

Tuesday, 29 October 2024

Road works in The Parade, Island Bay are disrupting the use of new cycle lanes.

An under-pressure Wellington City Council will sit down on Tuesday needing to find a further $130 million in cuts on top of the savage spending reductions already signalled.

Papers to the long-term plan committee, which is meeting on Tuesday morning, show Waka Kotahi NZTA funding for the three years that started in July is about $68m short of what the council assumed. Because they were for co-funded projects, that equated to $130m in transport projects that now had to be cut.

The need for transport cuts is a third reason the council now needs to amend its long-term plan, while also formulating a new annual plan for the next financial year and under significant time pressure for risk of breaching statutory rules, with a Crown-appointed observer watching over its shoulder and reporting back to the Government.

Wellington City Councillor Tony Randle said the $68 million funding hole put yet another pressure on the council.

“The time line is tight and cannot accommodate any delays,” council papers warn.

That time line shows the council needs to decide on draft spending cuts in November, agree a budget in December, consult publicly, then approve an amended long-term plan and next year’s annual plan at a June 26 meeting – just four days out from deadline.

The Government will not be funding new cycleways but will help pay for upkeep on those that are there or getting built.

The need for the re-write was sparked by the council voting to stop a planned sale of its 34% stake in Wellington Airport – a decision that undermined the financial foundation the plan sat upon.

It means the council is also being warned it will now need to find cuts on capital spending with any new projects, ranging from cycleways to pools to the Golden Mile, now under threat.

But council papers show two other “uncertainties and risks” could undermine the plan. Both are down to central government decisions: Water reforms, which will change how water infrastructure is funded and borrowed for, and the shortfall in Waka Kotahi funding.

Council spokesperson Richard MacLean could not supply details of what specific projects could be cut but said councillors would be given more information in November, and potentially on Tuesday.

“The funding shortfall is another pressure we need to understand as part of the process,” said councillor Tony Randle.

Local Government and Transport Minister Simeon Brown said the Government decided to appoint an observer on the “basis of the dysfunction” at the council.

“That will make our decision tougher than just not selling the airport shares.”

He said a lot of the funding shortfalls came from cycleways but projects affected could also include road maintenance and asphalting.

An emailed statement from Waka Kotahi said the Wellington region got a 6% increase in funding from the transport agency, compared to the previous three years, but new funding had to follow government policy.

Wellington Mayor Tory Whanau reacts to plan to have a Crown observer

Nationwide, $460m in government funding was going to be invested over three years on walking and cycling but this was for projects already under way or maintenance and renewal of existing cycleways and footpaths.

After “significant” funding for walking and biking in the past three years, “ there is no available funding for new projects”, the statement said.

Local Government and Transport Minister Simeon Brown said the Government was giving the Wellington region a “record” $3.3 billion in transport funding.

“Councils will always have a long list of projects they’d like to see funded, but central government is prioritising the must-haves, not the nice-to-haves or wish lists of councils,” he said.

It was not uncommon for councils to amend long-term plans but the decision to call in an observer was made on to the “basis of the dysfunction inside the council”, which reversed a significant long-term plan decision and resulted in a “significant” re-write, he said.