Part C: Summary of our financial approach

Introduction to our financial approach

Our 10-Year Plan increases levels of service in our priority areas – resilience and environment, housing, transport, sustainable growth, and arts and culture. These priority areas are responding to the key challenges for the development of our city.

In preparing this investment programme, we have considered both our ability to deliver the planned capital programme and meet the ongoing service level expectations of our residents and ratepayers.

The Council’s financial position means we can afford to invest in the priority areas. The Council has an AA credit rating – the same as the New Zealand Government – and has the ability to service higher borrowing levels than will result from the investments outlined in this plan.

The Council manages a portfolio of $3.71 billion of built assets (which doesn’t include land) on behalf of the community. Our asset condition information shows our assets are well maintained and in reasonable condition. However, we have some challenges around accommodating the forecasted population growth and ensuring our assets are resilient to climate change-related events such as rising sea levels, earthquakes and extreme weather events.

While our financial and infrastructure strategy covers 30 years, the significant expenditure on capital upgrades occurs in the first 10 years. Years 11-30 are mainly concerned with capital expenditure on asset replacements (renewals) and their profile, which is reflected in detail in section 8 of the ‘Financial and infrastructure strategy’ document – contained in Part G: Policies and Strategies.

We expect population growth to continue strongly over the short-to-medium term. We forecast a population of up to 280,000 by 2043. Over 40 percent of this growth is expected to be accommodated in the central city. As the city’s population increases, the commercial sector will also expand.

We will cater for much of our inner city growth in conjunction with renewal and level of service upgrades and operationally through the review of our District Plan. As a result, the expenditure categorised as ‘responding to growth’ primarily relates to the Let’s Get Wellington Moving programme (which is mainly a response to growth but also contributes to improved levels of service) and other growth areas – such as development sites in the north of the city.

Over the 10 years of this plan, we propose to invest a similar amount each year in renewing our ‘three waters’ infrastructure (which appears in the environment section) and transport assets. Our capital expenditure renewal in the social and recreation area is forecast to increase in the second half of our plan with our social housing renewal programme.

In response to the challenges our city faces, this plan also includes investment in improving our levels of service in a number of areas.

For details of our financial and infrastructure approach, refer to the Finance and Infrastructure Strategy in Part G: Policies and Strategies.