Bay of Plenty Regional Council is planning to raise a loan of $2.3 million in the next financial year to undertake capital works on the region's major rivers schemes.

The money is to be spent on repairing damage to the river ways caused by flooding in the past year.

A digger works at fixing a broken bank during the August 2010 flooding.

During deliberations on its draft annual plan this week, the council heard that the cost to repair stop banks and other infrastructure damaged in 2010 and 2011 storms was $9.4 million.

This breaks down to $1.8 million for operation expenses to repair damage and $7.6 million for new infrastructure to continue to provide the agreed level of service.

Of the capital expenditure of $7.6 million, 30 per cent would be spent in the coming 2011/2012 financial year and 70 per cent in the following year.

Submitters from the joint river scheme liaison group said affected communities could not afford to pay for the improvements and replenish flood reserves.

Funding of the remaining 70 per cent ($5.3 million) will be further examined in the Ten Year Plan process, along with issues related to the long-term sustainability of the schemes.

The joint river schemes requested that the council provide grants for capital funding and in return the schemes would double their contribution to flood reserves through targeted rates in the coming financial year, and investigate an appropriate contribution in following years to make the schemes sustainable.

The council's environmental hazards group manager, Ken Tarboton, says an insurance claim to the Local Authority Protection Programme has been made for recovery of the $1.8 million for operational expenses to reinstate the flood protection infrastructure.

The planned loan of $2.3 million in 2011/2012 would mean reserve replenishments and loan servicing of $131,489 would need to be found from general funds with $556,567 to be collected from targeted scheme rates.

He says this would have a long-term effect on the Ten Year Plan, together with further implications of decisions on future funding of the remaining $5.3 million repairs still required after 2011/2012.

The council agreed to contribute an additional $600,000 from council reserves to fund likely increased contributions required due to the impact on the LAPP scheme as a result of the Christchurch earthquakes.

Opotiki District Council submitted on behalf of its affected ratepayers in the six river schemes in the area, and had asked for a rating review to re-asses targeted rates, provision of a disaster grant and a risk assessment of river schemes to set work priorities. Whakatane District Council has also submitted in support of the projects and asked for investigations into the management of forestry harvests and its effect on flooding.