Within five years the Wanganui District Council will face the prospect of raising rates to pay for roading works or else cutting back on road maintenance.
The New Zealand Transport Agency has confirmed new thresholds for its financial assistance rate (FAR), and the council will need to find another $625,000 from rates to maintain present levels of roading.
A recent NZTA funding review means Wanganui's FAR will reduce by 1 per cent each year for five years. This means that by 2019-20 funding from central government will have dropped from 65 per cent of roading costs to 60 per cent.
"While this is not as bad as we had anticipated, we will have to increase our own funds if we want to maintain current levels of service," Mayor Annette Main told the Chronicle.
NZTA had originally signalled that the council's funding would reduce at 1 per cent each year for nine years. If that had happened, Wanganui's FAR would have dropped to 56 per cent and left a shortfall of more than $1.125 million.
Ms Main said the funding ratio for emergency works was not yet formalised but presented a significant increased risk for the council. For the first $1 million of emergency works, the FAR rate would apply. But for emergency works of more than $1 million, the rate would reduce by 1 per cent each year from a maximum 84 per cent in 2015-16 to 80 per cent maximum in 2019-20 and beyond. Currently there is a sliding scale from 62 per cent to 94 per cent of funding for emergency works.
"There's also an increase in having to fund railway crossings, which we didn't fund before," Ms Main said. "This requires us to contribute approximately $20,000 per year towards KiwiRail crossings."
The changes are driven by the Government deciding to focus its budget on roads of national significance and infrastructure needs, mainly in Auckland.
While the state highway network is totally state-funded, all the secondary roads are funded by a proportional mix of Government funding and ratepayer contribution.
For the 2013-14 year, the district council will spend $16 million on repairs, replacements and capital works for its road and footpath network. There was also an additional $3 million on emergency reinstatement works in the wake of last October's storm.