Wednesday 4 May 2011

A report providing a number of funding options for river schemes was discussed yesterday (SUBS: 3 May 2011) by the Bay of Plenty Regional Council’s Operations, Monitoring and Regulation Committee.

A range of funding options were presented to the Committee which included prioritisation and spreading of the repair work, reducing the level of service, changing the rating contribution, considering disaster relief grants, spreading operational expenditure and providing interest free loans to river schemes.

Decisions on funding for flood damage will be made during Council deliberations on the Annual Plan 2011/2012 following the hearing of submissions later this month.

Cost estimates of $10.5m to repair flood damage were previously presented to the Operations, Monitoring and Regulation Committee at their 23 March 2011 meeting. Since then, meetings have been held with river scheme liaison groups to discuss the options available for funding the repair works.

Operations, Monitoring and Regulation Committee Chair Malcolm Whitaker said all schemes recognised the need to undertake flood damage repairs, however indicative rate increases presented to scheme liaison groups were untenable and not affordable to many in the community.

“An insurance claim to the Local Authority Protection Programme (LAPP) has been made for the operational expenditure damage of $1.8m. However LAPP has indicated that due to the 22 February Christchurch earthquake they are not able to provide cover for flood protection until after 30 June 2011.”

Flood damage has now been divided into damage to current flood protection infrastructure ($1.8m) and new damage that requires new infrastructure ($7.6m) in order to continue to provide the current flood protection level of service.

Damage to current infrastructure is considered operational expenditure and applied to operating expenses for the financial year 2011/2012.

New infrastructure for scheme works is considered capital expenditure and has typically been funded with loans to the scheme that are paid back during a 20 year period.

Mr Whitaker said that if river schemes do not receive any insurance payments, operating costs for next year could increase significantly.

“This is subject to the final funding option that Council selects during their Annual Plan 2011/2012 deliberations later this month.

“While indicative river scheme targeted rate rises of up to 100 percent in the worst case have been presented to the Committee, rate rises could be lower than this if Council elects to provide some relief to river scheme ratepayers through one of the funding options under consideration.

“It would be premature to give example rate rises for particular communities until Council has made their decision,” Mr Whitaker said.

River scheme liaison groups have indicated they would be looking for a disaster relief grant from the Regional Council to cover both operational expenditure damage and capital expenditure damage.

The Annual Plan 2011/2012 hearings will be held on 16-17 May 2011.

ENDS

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