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Roads out at Masterton’s coast took a battering in recent storms.
Masterton’s storm-damaged roading network will cost about $27 million to fix, leaving councillors praying for a better-than-expected winter for the region.
And although it is anticipated that Waka Kotahi funding will foot the majority of the works, Masterton District Council may need to take out a $5m loan for the rest.
This is because its Flood Damage Fund is in the red.
The estimated cost to restore Masterton’s roading network – to the previous level of service – is broken down into $8.2m from June/July Storms 2022, $3.9m from Cyclone Hale, and $15.2m from Cyclone Gabrielle.
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The council assumed Waka Kotahi funding would cover $21.8m, while the council would fund $5.4m.
This is based on an enhanced Funding Assistance Rate of 77%.
At an extraordinary council meeting on Wednesday, elected members approved the programme of works and recommended that the chief executive apply for a bespoke funding arrangement with Waka Kotahi.
Chief executive David Hopman told councillors that with a bespoke arrangement, “the best case is still $2.5m council-funded”.
The council’s Flood Damage Fund is expected to be in a deficit position of close to $1m by June 30, 2023, having been used to fund works this year.
External loan funding is recommended as the best option to fund the council’s share of the upgrades, if the sum required is between $2.85m and $5.55m.
The debt will increase Masterton’s rates further from the 2024/25 year as it incurs interest and provision for debt repayment is built into the Long-Term Plan.
This in turn, could restrict the council’s ability to borrow money for other projects as it means prudent debt limits are closer.
Councillor David Holmes summed up the mood on Wednesday and said: “God help us if we have anything like a normal Wairarapa winter.”
The 2023/24 Annual Plan has included a provision to restore the Flood Damage Reserve funds to a positive number over a number of years, initially with a $500,000 increase in rates funding.
Prior to the Government’s Budget announcement, Masterton Mayor Gary Caffell said he wanted to see specific support to councils affected by the storm events for the reconstruction of local roads – in the form of an increased subsidy from Waka Kotahi.
He said the cost of borrowing would be “a burden on future ratepayers for many years to come”.
Public Interest Journalism funded through NZ On Air
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