Subsidy changes could cost ratepayers

Photo: ODT files
Photo: ODT files
Ratepayers could bear the brunt of a government proposal to retreat from subsidising some roading emergency works, the Dunedin City Council has warned.

A storm that historically had the likelihood of happening once in 10 years — and resulting in a cleanup bill of $10 million for the transport network — could cost the council about $1m more than under the existing system, the council said.

Councillors yesterday approved a submission objecting to a series of changes proposed by NZ Transport Agency Waka Kotahi (NZTA).

One would push up the threshold for an enhanced subsidy from a one-in-10 to a one-in-20-year event, meaning a storm would need to be more severe before the higher subsidy rate kicked in.

Another would shrink the enhanced rate from a 71% national subsidy to 61%.

The subsidy for more routine work sits at 51%.

Council infrastructure services committee chairman Jim O’Malley said the proposed rule changes would shift some of the cost burden away from central government and on to councils.

Action of this kind was "one of the reasons why we see extreme pressure on our rates".

Cr Christine Garey said the proposed changes were perplexing, given work required because of climate change and frequency of storms.

Reduced support from the transport agency would be problematic, she said.

In its proposal, NZTA said the scale and intensity of weather-related events had increased significantly.

The national fund allocation for responding to them was not sufficient to cover everything that qualified, the agency said.

One-in-10-year events had become more frequent, it said.

The enhanced rate was intended to be for "severe" events.

Shifting the subsidy level down from 71% to 61% would increase the local share and constrain cost escalation, the agency said.

Councils were asked what impact the proposed changes might have on them.

The Dunedin City Council said it had applied six times in the 10 years from 2014-15 for transport emergency works funding. It was granted this five times.

Under the proposed new criteria, the council said it would have been successful only three times.

The council pointed out funding to improve network resilience had not been available through the regular national fund, "so responding to increasing events that degrade the transport network has become reliant on emergency works funding".

Councillors were also informed yesterday of some positive funding news.

The council had budgeted for an $83m spend on pot holes over three years and about half would be subsidised by the transport agency.

An allocation of $85m was approved.

grant.miller@odt.co.nz

 

Advertisement