Whangārei District Council’s under-pressure Annual Plan budget was formally adopted on Thursday, at the first council meeting in the new $59 million Te Iwitahi civic centre.

The 2023-24 budget was adopted in the new council chamber presided over by a new photo of King Charles, the New Zealand flag, an image of the Treaty of Waitangi and the council’s carved wooden hoe urungi, the steering rudder of the waka as a symbol of leadership not always being from the front but from behind.

“This year’s annual budget is one of compromise. We will make every effort to keep rates affordable for the public while doing our best to cover our increasing costs,” Mayor Vince Cocurullo said.

The budget was unanimously adopted.

However, Cr Ken Couper – a WDC audit, risk and finance committee member – said he wanted people to know of the risks involved. Significant anticipated subsidy income for capital and operating costs was part of the picture. It was part of achieving a benchmarked balanced budget but put the council’s ability to achieve that budget at risk.

“If subsidised capital projects are not delivered, the associated revenue will not be realised as budgeted,” Couper said.

He said 2023-24′s increased subsidies masked the council’s true operating position.

“While achieving a balanced budget under the prescribed measures, the reality is that the revenue to meet ‘everyday’ operational activities is less than the budgeted operation cost to undertake them,” Couper said, reading from the council meeting agenda.

“While still being cashflow positive, this shortfall means depreciation will not be fully funded,” he said.

The council’s 2023-24 budget subsidy includes money from the Government’s climate emergency response fund, Crown Infrastructure Partners’ Three Waters Better Off funding, Waka Kotahi NZTA funding for Cyclone Gabrielle repairs and MBIE’s tourism infrastructure fund.

Couper said the situation meant more debt or deferring capital renewals in the longer term.

Cr Deb Harding said she did not want to leave the debt of today to the generations of the future to pay for.

“We have to learn to pay our way today,” Harding said.

The council has brought $60 million of 2022-23 capital projects forward to get done in the new financial year after they were not done in part because of weather. This has significantly boosted the amount of work to be done from July (2023) to June next year, in turn bringing the likelihood of increased carry-forwards from 2023-24 into the future.

This includes a new Abbey Caves walkway, a new $10 million roof for the Semenoff Stadium and Northland Events Centre, new pensioner housing, Whananaki wharf, One Tree Point boat ramp upgrade, Ngunguru wetland renewal, Pohe Island marine hub and carpark, Poroti water treatment plant and Whangārei city wetland (Kioreroa Road) upgrading.

Meanwhile the council also formally set a 7.9 per cent general rates rise, after community consultation revealed a preference for that, rather than a higher 10.9 per cent.

Mayor Vince Cocurullo said the water and sewerage rates income would not be part of the council’s coming years’ budgets. It was being “taken off us”, he said. The council’s Three Waters functions and income will be shifted to the top-of-New Zealand, Auckland and Northland Entity A under current Government plans.

Council general manager strategy and democracy Aaron Taikato said the council’s operational budget had to be adjusted as a result of reduced 2023-24 rates income.

Taikato said the budget would also be under additional pressure from inflation costs that were greater than increases in income, rising interest rates and spiralling cost of living.

Less income added risk to the council’s ability to deliver its commitments.

“There is also a potential risk to council’s ability to meet existing contractual commitments,” Taikato said in his Annual Plan meeting agenda item.

Cr Patrick Holmes said the council had to deal with the situation in front of it.

“The challenge for councillors and staff is to cut our cloth accordingly,” Holmes said.

Cr Gavin Benney said setting rates was an ugly process no one enjoyed.

■ Local Democracy Reporting is Public Interest Journalism funded through NZ On Air.