The rates increase in South Wairarapa District has slowed this year – and at the same time, ratepayer investment in upgrading local infrastructure will be accelerated.
The District Council’s new Long-Term Plan (LTP), starting from 1 July, has a major shift towards more borrowing for infrastructure projects and away from boosting rates each year to help fund capital works in the immediate years ahead.
In the 2025-26 year, ratepayers will pay the council only 4.3% more in total rates compared with the past year – and at the same time, the council plans to boost total debt by at least $10 million to pay for an enlarged capital expenditure (CAPEX) programme focused largely on water services infrastructure.
The LTP includes total CAPEX of $27.7 million in 2025-26 (the current year) and $32.6 million in the next year. These figures compare with a budgeted average of only $15 million per annum over the five years ended in 2024-25.
Project delays
In reality, the council has substantially underspent its CAPEX budgets in recent years. This has resulted in big “carryovers” from one year to the next, and in major delays in upgrading and renewing town water supply and wastewater systems.
The new LTP points to a major catchup on these projects this year and in 2026-27. A planned $36 million in waters CAPEX in those two years is 3 times more than actual investment made during the four years from July 2021 to June 2024.
Council financial statements for those four years show total CAPEX on waters of only $12 million. Over the same period, there was a cumulative increase of 66% in total rates paid – and this was before the budgeted 14.7% rates increase for the latest year, 2024-25.
The council’s next report will be released this October, with disclosure then on how much of
2024-25’s planned CAPEX – a high $29 million – was actually spent. The most recently available monthly financial report (February 2025) points to continued substantial underspending.
Higher rates
South Wairarapa’s waters infrastructure investment might not have run to plan but substantial higher rates have certainly been paid since 2021. Ratepayers might wonder how much of that was necessary – and what will come next as CAPEX finally looks to be shifting up a gear.
Certainly, higher rates income has enabled the council to pay off short-term loans and keep its total debt relatively low – and of course, to significantly increase its operating expenditure from year to year.
The LTP shows a planned leap in council borrowing in the current year, to $56.6 million by next 30 June. That will be up from an actual $26.9 million at 30 June 2024 and from whatever debt level is reported for 2024-25. It was budgeted at $46.8 million but the actual CAPEX trend suggests additional borrowing will not have run that high.
There is another major shift coming in council financing when waters infrastructure is transferred into a new Wairarapa-Tararua entity on 1 July 2027. The LTP forecasts foresees CAPEX of over $90 million in the seven years thereafter.
