Hawke's Bay council records biggest capital programme

Hawke's Bay Regional Council has adopted its Annual Report for 2025-26, recording its largest capital programme to date.

It invested NZD $75.1 million in regional infrastructure and capital projects during the year, including NZD $58 million on flood resilience work. That included completing post-Cyclone Gabrielle works at Waiohiki and Ōmāhu.

The report also said post-cyclone risk categories were lifted for 242 properties, marking a significant step in the region's recovery. The council also received NZD $16.4 million from Hawke's Bay Regional Investment Company, which was used to support council activities and reduce reliance on rates.

Financially, the council finished the year with an operating surplus of NZD $78.5 million, above the planned NZD $45.7 million. It said the difference reflected the timing of government funding for cyclone recovery and flood resilience work, as well as the timing of infrastructure delivery.

After capital expenditure and funding committed or reserved for future work were taken into account, NZD $347,000 remained as a general funds surplus available for unexpected spending in future years.

Recovery spending

A large share of the year's spending went on flood protection and related infrastructure in a region still dealing with the effects of Cyclone Gabrielle. The report outlined how funding was directed to both immediate recovery and longer-term resilience projects, including river management and hill planting to reduce soil loss and sediment build-up in waterways.

Chair Sophie Siers linked the figures to the wider regional recovery effort.

"Nearly four years on from Cyclone Gabrielle, we've achieved a huge amount, but there is still plenty of work ahead of us. We're building flood protection infrastructure, working with communities to plan for rivers that have room to move, and investing in planting our hills to protect our soils and reduce sediment in our rivers. This is the work needed to make Hawke's Bay stronger and more resilient.

"But none of this happens through council alone. It takes a whole community to make things happen, and I want to acknowledge all of you across our region who contribute your time, energy and expertise to getting this work done. Our progress depends on that collective commitment, and we look forward to continuing to partner with you over the next two years," Siers said.

The figures reflect a balance between delivering infrastructure and retaining funds for approved work that has not yet been completed. That is a central issue for local authorities managing large recovery programmes, where grant income can arrive before construction and remediation work is finished.

Funding mix

Chief Executive Vaughan Payne said the operating result should not be treated as spare cash for new initiatives, with much of the surplus tied to the timing of external funding and work still to be delivered.

"The higher than budgeted surplus is primarily due to the timing of government funding received for cyclone recovery and our flood resilience programme, and the timing of infrastructure delivery during the year.

"The operating surplus does not represent cash available for new spending. During the year, we invested $75.1 million in capital projects across the region, the largest capital programme HBRC has delivered. This included $58 million on flood resilience works to help build stronger and more resilient communities.

"Funding for approved work still to come has been retained for that purpose, helping us deliver the programme without asking ratepayers to contribute more than is needed.

"More than 70 per cent of our operating revenue came from sources other than rates, including government grants, subsidies, investment income and insurance recoveries. This helped reduce the financial burden on ratepayers while enabling important work across the region to continue," Payne said.

More than 70 per cent of operating revenue came from non-rates sources. Government grants and subsidies made up a large share, while investment income and insurance recoveries also supported the programme.

The NZD $16.4 million returned from Hawke's Bay Regional Investment Company provided another source of funding at a time when councils across New Zealand face pressure from borrowing, infrastructure backlogs and rising costs. In Hawke's Bay, those pressures have been sharpened by flood recovery demands and the need for continued resilience spending.

By combining external funding with retained allocations for unfinished projects, the council is seeking to complete approved work without increasing the burden on ratepayers beyond what it says is necessary. The annual report figures show that, despite the sizeable reported surplus, only NZD $347,000 remained available for unforeseen future costs.