Horizons owns and manages a variety of flood protection assets, ranging from approximately 500 kilometres of stopbanks, to over 1,100 kilometres of drains and 509 floodgates. We have insurance cover for these assets. We are proposing to increase our insurance cover to account for various pressures, including inflation and increased risk of damage to these assets from natural hazards.

Flood protection assets contribute to a number of our community outcomes including helping to keep our region’s transport networks efficient, ensuring our region’s communities are resilient to the impact of climate change, and enabling our region’s economy to thrive. However, we are now more aware of the risk to these assets posed by earthquakes. Recent modelling showed a 1-in- 500-year earthquake event may damage about $247 million of infrastructure assets. Climate change has also increased the likelihood of severe weather events, which may place our communities and flood protection assets at risk in a large scale event like Cyclone Gabrielle.

Since 2018, the value of these assets has increased from $406 million to $990 million. Inflationary pressures have also increased the cost of insuring our assets. When considering the increase of our infrastructure valuations and our increased knowledge of the damage a significant earthquake could have on our infrastructure assets, a conservative view would indicate Horizons risks being under-insured in the case of a catastrophic event like an earthquake.

Council agreed in November 2023 to increase its insurance cover between November 2023 and November 2024 to enable Horizons to raise the amount it could claim after an event from $100 million to $200 million. We are now proposing to increase our insurance cover from the end of 2024 onwards to adjust for inflationary pressures and allow us to continue to claim up to $200 million per event, and up to $500 million (instead of the current $300 million) in conjunction with other councils through Manawatū-Whanganui Local Authority Shared Services (MW LASS) – a company owned by multiple councils with the goal of finding ways to provide services at a cheaper cost.

Increasing our insurance cover will ensure we have more security in the case of a large event, while keeping in mind affordability of insurance for our communities. However, it is important to note this does not fully cover the cost of all river management protection assets in the case of a catastrophic event. Costs in these situations may be covered from various sources, including scheme reserves, central government funding and/or loan funding.

The rating impact of this proposal is detailed as an average in Option 1 but will vary across the Horizons Region, depending on the value of flood protection assets near where you live. The bulk of the impact (about 71%) will fall on ratepayers who live in the Lower Manawatū Scheme area between Feilding/Ashhurst, Palmerston North and Foxton. However, all ratepayers will contribute to the increased costs via a general rate contribution as the assets help to protect to the health of the environment, people and economy across the region.

There are also other options with varying degrees of cover – Option 2 allows us to claim up to $200 million worth of damage plus inflation but maintaing the $300 million collective claim. Option 3 allows us to claim up to $500 million alongside MW LASS councils (plus inflation) but maintains the individual $100 million claim. Option 4 allows for inflation only with no increase in claim amount. The implications of options 2-4, in a nutshell, is more risk. If we were to have a large event, it’s highly likely we would only be able to repair a portion of damage compared to the preferred alternative of Option 1. For more information around the detail of these insurance increases please see the draft Infrastructure Strategy in the Supporting Information.

*This means that for every $100,000 of your property’s capital value, the value stated will be charged on your rates each year.

**This activity is rated via a combination of the River and Drainage targeted scheme rates and the general rate.

The Freshwater and Partnerships Activity works with external partners to improve aquatic habitats through fish passage and riparian management, and water quality through stream fencing, riparian planting, advice on constructed wetlands, and other interventions. The programme also enables community projects through funding and advice and provides advice, support and awareness of freshwater related rules and regulations – all to help support the community outcomes of healthy ecosystems and empowered communities.

Horizons has been successful in obtaining a range of government co-funding over the last decade, with this activity undertaking the work programmes that have resulted from it. Two of the programmes, the Regional Riparian Fencing and Planting Project and the Enhancing Fish Populations Through Fish Passage Remediation Project are funded via the Jobs for Nature programme that is administered by the Ministry for the Environment. These projects were originally scheduled to end in June 2023 but are now continuing into year 1 of the Long-term Plan (2024-25) via extensions to the five-year contract timeframes.

The continuation in year 1 of the Long-term Plan will be funded by a carry forward of government co-funding and rates that have already been rated for. There will be no additional rates impact. However from 2025-26, the end of the Jobs for Nature funding for these projects plus the Horowhenua Freshwater Management Unit Water Quality Interventions Project is set to reduce the overall funding for the Freshwater and Partnerships activity by $2.1 million to the pre-Jobs for Nature budget (“the baseline”). This will include a reduction of 6 staff positions. Option 1 identifies this scenario as Council’s preferred option in the face of increases in many other areas of Council where there is less choice available. This option will return to pre Jobs for Nature budget levels, which due to inflation, means a resulting decrease in the number of plants and the amount of fencing we can deliver. That is 30 kilometres of stream fencing and 70,000 riparian plants (across the Manawatū and Regional programmes). This is compared to the 160 kilometres of stream fencing and 140,000 riparian plants that has been enabled by the funding from Jobs for Nature in 2023-24 alone.

However, we are offering communities an opportunity to consider some other options for maintaining an increased level of service for the Long-term Plan if they wish. Both options would require an increase to the pre Jobs for Nature budget.

• Option 2 a target of 80 kilometres of stream fencing and 160,000 riparian plants, supported by one new role.
• Option 3 a target of 110 kilometres of stream fencing and 240,000 riparian plants, supported by two new roles.

These options both propose additional stream fencing and riparian planting activity to enhance water quality, and improve aquatic habitat. For both of these options a higher proportion funding has been directed at riparian planting over stream fencing due to national regulations requiring fencing in some area, the demand for riparian planting previously being larger than we could co-fund, and the co-benefits to water quality and aquatic habitat enhancement.

*This means that for every $100,000 of your property’s capital value, the value stated will be charged on your rates each year.
**This activity is rated 100% general rate based on equalised capital value.