Message from the Chair

Chair Fran Wilde

Delivering our Annual Plan for the next year – especially for such an interesting and diverse region – should be an exciting occasion, albeit tempered by the frustration of demand exceeding affordability.

However, this year’s planning round has been dominated by the reality of steeply rising oil prices which have a direct impact on our bottom line through the cost of diesel for public transport. This has provided a huge challenge.

To illustrate how quickly the situation changed: when we took the plan out for consultation in April 2008, the price of oil was NZ $139 a barrel. By the time we had made our recent decisions on the new rates for next year, it was NZ $176 – and rising!

We anguished over this and finally decided it would be prudent to suppose that oil costs will continue to increase, so we set a rates increase that assumed an average price of NZ $183 for a barrel of oil over the next year.

The impact of this was substantial, requiring a rates rise of 4.78%. And that was before any other part of the budget was considered.

Fortunately, we have been able to hold costs in many other parts of our operations through careful management, so the whole of the rest of the rates increase is 4.09%, compared with inflation of 3.4% during the last year.

One of the beneficiaries of this latter increase is flood protection, where we have responded to community requests to speed up delivery. Floods (and droughts) as a result of increasingly unpredictable weather patterns have drawn attention to the need for careful and prudent management of our land and rivers.

The challenge of climate change is also driving changes in our behaviour as an organisation. Greater Wellington is a member of the Communities for Climate Protection (CCP) programme in New Zealand and we are working on reducing our own carbon emissions.

More importantly, we are collaborating with local authorities and other stakeholders at a regional level and during the forthcoming year will be setting emission reduction targets for the region and developing an action plan to meet those targets.

Another partnership across the region with local authorities is our Regional Water Strategy, which will bring together all aspects of water delivery – including, for example, bulk water, rivers, ground water management, home collection and conservation – within one framework. We have just begun work on this and hope to make substantial progress throughout the next year.

Similarly, we are looking at defining a regional approach to renewable energy, working with a range of local and central government agencies and the private sector to identify viable and sustainable choices for households and policy makers alike.

Earlier I focused on the impact of oil prices. Even without that cost, public transport is our fastest growing area as we struggle to make up the infrastructure deficit of the last few decades.

Of course the whole fleet of planned new buses and rail rolling stock can’t be introduced immediately, though we will be getting some refurbished carriages in the next few months and the first of our new trolley buses are already on the streets. Commuters will benefit from these and even more from the new additions over the next two years.

The forthcoming year will also see a high level of activity in transport planning (including roads), with more consultation on the Ngauranga to Airport programme and information expected shortly on the cost of the
new State Highway One route in and out of Wellington through Transmission Gully.

Much of the Greater Wellington delivery is in areas that regional residents take for granted and it generally happens efficiently and quietly. For example, once more we have been able to hold the total cost of bulk water provided to the four metropolitan local authorities.

This is a welcome trend, but I must caution that there are major issues in a range of operational areas including biosecurity, land management, economic development, flood protection and public transport that we foresee having increased operating costs or requiring a capital injection in the next few years.

As in all annual plans, the rates increase for next year will impact differently on properties across the local authority areas, depending on what specific rates and charges are applied to meet local needs (e.g. flood protection) and also of course, changes to the relative capital value of individual properties. A table showing average increases is set out on page 10.

Finally, may I thank those who responded to our invitation to provide views on our proposals for this Annual Plan. Your input was most welcome. All of us will never agree on everything, but we are lucky to live in a dynamic community where many share a very strong commitment to and passion about what happens in our region.