Strategy Committee recommends status quo for financing infrastructure

Published on 08 November 2018


Horowhenua District Council’s Strategy Committee review of the funding of new infrastructure continues.

At yesterday's meeting, a report highlighting the outcome of initial investigations and how they could be affected by national policy changes was considered.

Council previously committed to investigate alternative methods for funding new infrastructure, such as development contributions, financial contributions and private developer agreements, as part of the development of the 2018-2038 Long Term Plan.

Council’s Group Manager Corporate Services Mark Lester said initial investigations showed the policy framework for funding new infrastructure is complex, and the legislative landscape is likely to change.

In a briefing provided to Council on 24 October, Mr Lester said the government has signalled a broader range of tools will become available to fund infrastructure, rebalancing of development risk between local authorities and the development sector, and making long-term finance available to developers. In addition, government reviews of funding for local government and delivery of water, wastewater and stormwater services are underway.

“Combined, these factors create an uncertain policy environment for making changes to Council’s Revenue and Financing Policy. Council officers will monitor developments at a national level as they relate to the funding of infrastructure,” he said.

The Strategy Committee recommended an Exceptions Annual Plan process, which will enable Council to propose minor adjustments to its Revenue and Financing Policy if necessary. The current policy also allows Council to arrange for private developer contributions on a case-by-case basis.

Council forecasts an average of less than $1 million of growth-related capital expenditure per year that could be funded with development contributions, which must be directly linked to providing new infrastructure, proportional to the level of benefit received from the new assets, and used for the activity and location for which the contributions were made.

The Strategy Committee recommended that Council continue investigations and analysis to be ready to consider the introduction of appropriate funding tools as part of the 2021-2041 Long Term Plan, when greater certainty around growth-related capital expenditure is expected, or earlier if legislative changes occur sooner than anticipated.

The recommendations from the Strategy Committee will be considered at the November 21 Council meeting.