The Infrastructure Strategy and the Financial Strategy are developed in conjunction as part of the LTP. These strategies are the foundation documents that drive our spending and are a critical component of our community’s long-term success.
Our Infrastructure Strategy
The Infrastructure Strategy acts as a 30-year roadmap, focusing on crucial areas such as water supply, wastewater management, stormwater systems, transport, facilities, parks, and waste management.
It is set within the Council’s draft strategic priorities, emphasising inclusivity, sustainability, financial prudence, and adaptability to climate change and demographic changes. The strategy outlines four key action areas:
- Enhancing our data management systems to support better decision-making and asset management.
- Long-term sustainability, advocating for a balanced approach to funding asset renewals and maintenance while considering the whole life-cycle costs and potential divestment of under-used assets.
- Building resilience against climate change and natural hazards, which involves developing guiding principles for climate-conscious investments and increasing community engagement in adaptation planning.
- Supporting sustainable growth, for example encouraging integrated planning for infrastructure that promotes active travel, public transport, and road safety.
Draft Infrastructure Strategy
Read the full Infrastructure Strategy.
Renewing our assets
Key assets managed by the Council include water supply, wastewater, stormwater, roads and footpaths, parks and community facilities. It is critical that planning is in place to renew these assets at the right time in their lifespan, before they fail or are no longer fit-for-purpose.
This renewal process is managed in several ways. For water, wastewater and stormwater pipes we use the Asset Assessment Intervention Framework (AAIF) model. For other assets we manage renewals by balancing age and condition of the asset, but also taking account of criticality. This ensures that risk is managed through a prioritisation process, rather than simply renewing assets that are still fit for purpose, or less critical to the city than others.
For most asset classes, the planned expenditure set aside for renewal over the life of this LTP is in the range of 86-96% of depreciation, which is common amongst local authorities.
However, two activities are planned for a lower level of renewal during this LTP, wastewater (60%) and stormwater (40%).
Context is crucial to this. Both wastewater and stormwater have been the subject of intense focus from the Council and central government since the Canterbury earthquake sequence. Over the past nine years wastewater has been renewed at a total of 162% of depreciation, while stormwater has been at 203%. While this is unusually high it reflects the post-quake needs of the city.
The strategy for managing the proposed renewals approach for wastewater and stormwater has three parts. Firstly, the very high rate of expenditure in the decade before this LTP, combined with a significant increase in renewals in later years of the Draft LTP 2024–2034, mean that these assets can be renewed at a reduced rate during the interim years without significant impact on levels of service. Secondly, the criticality processes mentioned above around use of performance and maintenance data, as well as condition checks, ensure that critical renewals will occur. Finally, Council’s funding options mean that any critical renewals and repairs not planned for are able to be funded.
We are proactively improving our asset condition data quality and collection methods, and utilising asset information more effectively, to align and ensure our asset renewal decisions are accurate and fit for purpose. We do this well for most critical assets. However, we recognise that data quality for our less critical assets falls short of best practice standards and we’re taking steps to improve this. By continually improving the accuracy and availability of our asset condition data, we’re positioning ourselves to plan our renewals even more strategically in the future – retaining our focus on prioritising critical needs and ensuring our responses meet the city’s immediate and future requirements.
The Infrastructure Strategy considers the 30-year view taken in our Asset Management Plans, which detail our activity and the most likely investment required over the next 30 years. Following is an asset specific breakdown of this proposed investment, outlining how we plan to renew and replace our assets, improve our service levels, and respond to increased demand.
Our Financial Strategy
The Financial Strategy describes the Council’s current and future financial position. It details the conditions which influence funding and investment decisions. The Financial Strategy also explains the fiscal limits and constraints the Council will operate within over the term of the LTP.
This has been a challenging Financial Strategy. Like all other local authorities in New Zealand, we face multiple financial challenges including significantly increased debt servicing costs, significantly increased insurance costs, challenging asset renewal requirements, the costs of climate change adaptation and mitigation, and the general increase in costs that a high rate of inflation has brought.
In addition, we face the final phase of our rebuild following the earthquakes of 2010/11 with costs associated with the construction and then operation of key facilities such as Te Kaha (the multi-use indoor arena), Parakiore (our flagship sports and aquatic centre) and Te Whare Tapere (the performing arts precinct).
In setting our Financial Strategy, we need to balance the costs of delivering our projects and services with the funding available from rates and borrowing. These three variables – cost, rates and debt – are interrelated. Any change in one needs to be offset by changes in at least one of the others. For example, if we reduce our rates increase, we need to reduce our costs (by deferring projects or reducing our levels of service), and/or take on more debt.
Getting this balance right promotes a sound and sustainable financial position where our citizens can look forward to enjoying living in a world-class sustainable city with confidence, pride and optimism.
Read the full Financial Strategy.
A note on inflation
The Council uses inflation rates provided by Business Economic Research Limited (BERL) – the organisation that provides inflation information to the local government sector for all categories of capital and operational expenditure. These inflation rates differ from Consumer Price Index (CPI) inflation because CPI is based on price increases of standard household items, whereas BERL measures price increases on activities carried out by councils, such as underground pipework and roading infrastructure. The numbers in this draft LTP include inflation determined by considering a mix of BERL rates and Council expenditure categories they apply to.
Weighted average inflation for both operational and capital costs
