Most of the increases came from “other income” and subsidies or grants.
“This reflects the current climate of growth in some areas, higher fees in others, and continued central government support for work to recover from severe weather events.
“Councils are continuing to rely on subsidies and grants, which are becoming increasingly important to how they provide services.
“The amount of funding that councils receive from subsidies and grants has more than doubled in the last seven years.”
Taylor said the number of councils not meeting their balanced budget benchmark was evidence of local government facing financial and infrastructural challenges.
The challenges included conditions in the wider economy, such as ongoing recession, unemployment and rising household costs, making increases in rates and fees less affordable.
Taylor said councils were borrowing more.
Councils’ debt rose to $29.9 billion in 2023/24, a 15% increase from $25.9b in 2022/23.
“Total council debt has effectively doubled since 2017.”
At Gisborne District Council, debt more than doubled between 2017 and 2023/24, rising from $43.1m to $157.8m.
A Gisborne District Council spokeswoman told the Gisborne Herald the majority of debt was related to critical infrastructure.
“We have completed over $90m [investment in works] for wastewater and the wastewater treatment plants, most of which occurred within the above timeline.
“We have had this planned for several years.
“Effectively, most of our strategies leading up to 2018 acknowledged we were reaching a level of investment needed for our infrastructure hump.
“The Waipaoa Flood Protection also started within this time with $13.5m in loans.”
Other additional debt over this period related to:
- The council’s share of future of Severely Affected Land (FOSAL) Category 3 50% share buyouts at $6.5m
- Other recovery reinstatement works (non-insurance proceeds) of $17.7m
- Kiwa Pools $5m. This is part of the Provincial Growth Fund funding package and councils’ contribution to the $46m Kiwa Pools project. “We loan-funded $5m of our share of the costs.”
- Other miscellaneous debt, including shortfall from dividends.
Taylor said councils were investing more in infrastructure. After years of underinvestment, many councils had ageing infrastructure in poor condition.
To address this situation, councils were increasing capital expenditure, and many were embarking on major capital programmes.
The council spokeswoman said total capital expenditure between 2017-24 was $476.2m.
The report went on to say councils were meeting some performance measures, but were falling short on others.
Only seven of the 61 councils reported that they had processed 100% of building consent applications within the statutory timeframe of 20 days, while 20 councils reported that they had processed between 95% and 100% of building consent applications within the timeframe.
Gisborne District Council did not meet the 100% target but did process 85% of consents within 20 working days.
A spokeswoman said there was a significant increase in building inspections, especially within the first 10 months of the 2023/24 year.
“The increased inspections, along with FOSAL evaluation, [and] house-lifting consents had an impact on not being able to meet the target.
“This year 2024/25, the target was met at 98%.”
