Audit NZ not happy with Wellington City Council's 10-year-budget

A worker at the scene of the burst pipe. Photo / Jack Crossland

Audit New Zealand has raised several concerns over Wellington City Council's 10-year budget, which has been adopted this morning.

Audit director Karen Young told councillors many of the council's water assets were old and a significant proportion of them have passed the end of their expected useful life.

"The council has also experienced several high-profile pipe failures, which have affected levels of service."

Young said the council has based the forecast renewal of these assets on their age capped by what is considered affordable, rather than on their actual condition.

"This could result in more asset failures during the 10-year period of the long-term plan, reduced levels of service, and greater costs than forecast," Young warned.

Audit NZ has issued a qualified opinion over this concern, which is acts as a red flag.

Wellington Water is rapidly assessing the condition of its assets, but the work won't be completed until later in the year.

Other concerns raised outside of the qualified opinion include uncertainty over the Government's Three Waters reforms, the reliance of external funding for a new sludge treatment plant, and a forecast the council's debt limit will be exceeded.

Another concern was the council's capital programme.

The council will spend $3.2 billion on capital projects over the next decade - $900 million more than the previous long-term plan.

But there is uncertainty whether this investment is possible because of several factors including "significant constraints" in the construction market.

Mayor Andy Foster said he found the qualified opinion challenging.

The council is fully funding water infrastructure asset renewals for the first time, he said.

Foster said information from Wellington Water's condition assessment will be available for future long term plans and forecasts.

He accepted the capital programme presented a significant risk.

Foster said the plan was ambitious and it responded to the needs and aspirations of the community.