Whanau said Brown’s cuts to the arts and community initiatives were deeply concerning.
“I’m sorry to say, but to me, that’s going to rip the heart out of the city.”
It was important to invest in infrastructure as well as the city’s community, Whanau said.
“That is the stuff that stops a city from dying.”
Whanau is also not concerned with Wellington City’s forecast $70 million operating deficit, which council officials have called “financially prudent”.
So, let’s break it down.
Capital expenditure is money the council spends to acquire or upgrade fixed assets. For example, the biggest capital spend the council wants to make this year is $76m on earthquake-strengthening and improving Wellington’s central library.
The second biggest spend is $46m on earthquake-strengthening and re-vamping the Town Hall.
Below is an interactive map of the proposed capital expenditure. Click on a category to see more detail about how the council is planning to spend ratepayer money.
Operational expenditure is money the council spends on running its day-to-day activities. For example, $10m on cleaning streets over the next year.
Some of these expenses are offset by the income the council also receives from a certain activity, like parking services and enforcement.
The council plans to spend about $19m on this activity, which will generate about $41m worth of income over the coming year.
Below is an interactive map of the proposed operational expenditure. Click on a category to see more detail about how the council plans to spend ratepayer money.
Whanau said her budget highlight was the capital spending on infrastructure, resilience and climate action.
“We know that there is always some tension around cycleways, but to me, cycleways are infrastructure, and it’s climate mitigation, so that’s the part that I’m proud of.”
Whanau said she was not concerned about the forecast deficit because it will be dealt with in the Long Term Plan (the council’s ten-year budget).
Wellington City Council is planning to spend almost $1.3b this coming year. You can find more information about the plan and provide your feedback here.
The operating expenditure budget shows there is an $84m deficit. However, after taking into account the uplift in value of the council’s investment property, the expected deficit is $70m.
The deficit is primarily driven by rates not fully funding the depreciation expense for water infrastructure.
Wellington City Council chief financial officer Andrea Reeves explained that assets are depreciated over the course of their useful lives.
For example, a building worth $1m that’s expected to last for 100 years could be depreciated for $10,000 annually from rates, she said.
Reeves said this meant those who were benefiting from the asset at the time were actually paying for it.
But in the wake of Covid-19, inflation, and volatile construction costs, a recent revaluation of Wellington City’s water infrastructure assets was ordered.
It resulted in a significant increase in the estimated replacement cost of those pipes, so the council decided to defer some depreciation in the short-term.
“To fund the depreciation on that straight away would require us to increase our rates significantly,” Reeves said.
“What we can do, is we can do it over a longer time horizon, because water assets can last a lot longer than we anticipated... so we’re smoothing the impact of that hit.”
This will be addressed as part of the council’s upcoming Long Term Plan.
The Government’s Three Waters reforms, whatever shape they eventually take, could mean the council will not be funding the replacement of these assets anyway.
