Adjusting our sails
Target Operating Model report
About the Target Operating Model
In early 2025, our Corporate Leadership Team made the decision to develop a target operating model. A target operating model is about planning for a future state - it’s a blueprint that shows how an organisation should operate to achieve its goals.
This report delivers on Council’s commitment to a line-by-line review of budgets and spending. It provides insights and options for consideration but does not lock in or confirm any decisions. Any changes are subject to Council decisionmaking processes and engagement with communities and staff.
Cost structure insights
$30M
Financing costs
The annual cost of servicing Council’s loans and other debt (interest)
$106M Depreciation
An annual charge that shows the Council’s use of its assets over time
Why we are doing this
Local government is grappling with rising costs, cost-of-living pressures for communities, and significant reform reshaping the sector. Our community has been clear: future rates increases must be carefully managed.
Council has already made savings of $55M in recent years as part of annual plan and long term processes. These easier cost trimming opportunities are exhausted.
If the Government’s proposed rate cap of around 4% is to be met, Council needs to save approximately $24M annually by 2034. Savings of this scale cannot be made without fundamental changes to the services Council provides and the assets it owns.
$56M Employee costs
The annual cost of employing the Council’s workforce
Other interesting facts and figures
41m2
Pool capacity
We provide more capacity* than the 27m2 national average *including summer pools
Approx. 600 Council assets
Many assets are ageing, under utilised or financially unsustainable 18% Fewer staff
We employ fewer staff per resident than comparable Wellington councils
$176M Supplier costs
The annual cost of purchasing goods and services from third-parties
9 Hub facilities
We have more facilities per resident* than similar councils
*Lower Hutt: 1/12,500 residents vs. similar councils: 1/19,000 residents
What you can find in the report
The report was developed by leaders across the organisation and supported by PwC. Staff engagement included a staff survey and roadshows.
What the report recommends
Although Council has made significant savings, this is not enough and approximately $24M needs to be saved annually by 2034. Savings of this scale cannot be made without fundamental changes to the services Council provides and the assets it owns.
Three options were developed and Council has recommended the middle option. To achieve the required savings, the report identifies options including service rationalisation and asset divestment.
These are not easy conversations, and we know our services and assets are valued by our community. We are committed to being transparent about the choices and trade-offs involved.
What will happen next
No decisions have been made. Adjusting our Sails is a framework, not a set of confirmed decisions.
Any changes will be subject to Council decision-making processes and community engagement through the Annual Plan and Long Term Plan processes over the next 12 months.