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$1.1m budget blowout


Wellington Water has made public there will be a $1.1 million overspend in South Wairarapa District Council’s water operational expenditure budget this financial year.

South Wairarapa councillors are set to meet on Wednesday to discuss funding options for the blowout, but the recommended solution is to use $1m of the government’s Three Waters stimulus package to cover the overspend.

The reasons behind the overspend included unplanned maintenance to repair networks, inflation, and workforce complexities.

The recommended option involved moving the “$1m that’s been spent on capital renewals and projects under the stimulus funding, into our normal capital programme”, the report said.

“Then move the overspent operating costs into the stimulus-funded programme.

“This would result in the overspend being in our normal capital programme, which has more funding options, all of which only affect those paying water rates.”

Operational expenditure is normally funded by way of income [including rates], while capital expenditure can be funded by loans or council reserves.

The report said in this case, the redirected capital overspends could be funded from depreciation reserves for water, which had an opening balance of $4.8m at July 1, 2021.

The deadline date for spending the stimulus funding is June 30, 2022.

A stimulus funding update from Wellington Water said it was still aiming to get projects complete in advance of that date.

It said there was “absolutely no extension beyond this date, and funding and expenditure should be finalised within the current financial year as much as possible”.

“We will be closely managing budgets as they get close to being expended, and some funds will move between workstreams to ensure that we make maximum use of the available funding,” the previous report said.

In the council’s Long Term Plan [LTP], the prospective capital expenditure for the 2021-22 financial year for three waters was: water supply [$3.33m], wastewater [$2.88m], and stormwater [$10,800].

Operating costs in the LTP were: water supply [$3.44m], sewerage [$2.14m], and stormwater drainage [$392k]. — NZLDR

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