Funding uncertainty threatens Westport flood protection
Tue, 15th Sep 2026 (Today)
Westport's new flood protection scheme could need a rejig after escalating costs halted progress.
The West Coast Regional Council may not be able to borrow more money to complete the Westport Flood Protection Scheme, with a new report spelling out cashflow and liquidity problems at the council.
The council will consider whether to begin a special consultation procedure on two options for a proposed 'reset' at an extraordinary council meeting tomorrow.
A staff report says cost increases for the reset present "liquidity pressures" and may restrict the future borrowing capacity of the council for the scheme.
The report is projecting net borrowings for the preferred option 2 will peak at 143.7% of council revenue by 2030, while the debt limit for council borrowing is 175%.
In August, the council agreed on two new flood protection options to be put to the public -- a $37.6m 'core protection scheme' and a $38.7m 'optimised hybrid scheme' with the council indicating a new 'optimised hybrid scheme', with a $23m shortfall as its preferred option.
That would protect Westport from a one-in-67-year flood in contrast to the current scheme which was to deal with a one-in-100-year flood event.
Both options cost significantly more than the current $25.8m scheme, but pulls back the level of physical protection for the township.
The regional council will pay for the reset through targeted rates over 80 years, with rates rising from $32 per property in 2027 to between $173 and $179 by 2034.
The current scheme is being built in response to the record July 2021 flood that inundated parts of Westport.
The report also flags the risk of the council not gaining a clear direction from the public on either of the two options proposed.
The risk now is cost pressures related to the flood scheme build and the capacity for the council to continue borrowing, which could see it breach the covenants it has with the Local Government Funding Agency (LGFA) in the future, thereby restricting access to further borrowing, unless the agency grants the council a waiver.
"Any breach of the LGFA covenants may require LGFA approval or a waiver, impose additional lending conditions, and necessitate increased revenue, deferred expenditure, or changes to the scope and timing of the scheme and other council work programmes," the report says.
The report recommends the council monitors its liquidity and cashflow, as well as maintain a "liquidity buffer" to cover any emergencies and adverse budget variances.
Not gaining a clear preference between the two options through community consultation is a risk, meaning the matter will have to go back to the Westport Rating District Joint Committee.
A month-long public consultation on the reset will begin on September 21 if councillors approve of it in tomorrow's meeting.
