Tauranga City Council face losing a significant subsidy in relation to the installation of new LED streetlighting because of supply issues.
The project is part of a nationwide initiative supported by the Government and funded by Waka Kotahi/ New Zealand Transport Agency who are due to pay for 85 per cent of the upgrade costs.
As part of the Capital Programme report presented to council commissioners at a meeting this week, it is documented that Council could lose the funding if the programme stretches into the next financial year.
Commissioner chair Anne Tolley suggests it’s something the commissioners will bring up with Waka Kotahi at their next meeting.
“I was a bit concerned to read that we might lose funding,” she says.
“Surely Waka Kotahi wouldn’t take our funding away just because of supply issues from overseas?”
TCC are in discussions to discover what subsidy Waka Kotahi would be willing to contribute if the project extends beyond June.
“The 85 per cent Funding Assistance Rate for councils to upgrade their street lights to LED was initially for the 2015-2018 National Land Transport Programme period,” says Waka Kotahi Bay of Plenty system manager, Rob Campbell.
“This was then extended to June 30, 2021, the end of the 2018-2021 NLTP period.
“The 85 per cent Funding Assistance Rate for street light upgrades to LED will finish on 30 June this year. Any upgrades after this date will be funded at councils’ normal FAR.”
For Tauranga City Council, this rate sits at 51 per cent.
Currently, TCC forecasts a spend in the region of $8.5 million in the 2021 financial year on LED streetlights, against a budget of about $9.7 million.
“We are highlighting the risk here that it may be taken away,” says TCC general manager: infrastructure, Nic Johansson.
“When this initiative kicked off, with a higher funding contribution, there was a definitive sunset on that contribution by the end of this year and it has been going for three years now so it is a long programme.
“It is something we are working very closely with Waka Kotahi and are trying to draw down despite issues with timing. We may well be able to get there but we are not sure at this point so we are highlighting it as a risk.”
Johansson confirms installation of the streetlights by contractor McKay is on time and on budget, but the issue solely stems from supply chain problems related to the impact of Covid-19.
LED’s have been ordered, according to the report put toward council, with 11 shipments on the water and another two yet to be dispatched.
The situation is likely to stretch into the next financial year meaning council and Waka Kotahi will need to come to a new agreement on subsidy.
The switch to LED lights is intended to reduce electricity usage by about 50 to 75 per cent compared to the current traditional lightbulbs.