The body responsible for deciding how funds will be doled out is the New Zealand Transport Agency (NZTA) which is currently working its way through a major overhaul of its funding assistance rate (FAR).
It's a process which has local bodies on edge.
NZTA said transport faces major challenges, driven by an ageing population, and the fact more people are living in metropolitan centres which means a drift away from rural and provincial centres such as Wanganui.
The agency also has to find a balance between providing certainty in terms of funding and, at the same time, having the ability to respond to changes.
FARs have been getting a deal of publicity lately, mainly because some councils are upset that cuts to their share of the funding cake are looming.
Funding for our roads had its origins in a series of decisions made over the past 150 years.
What began as one-off grants to build and repair "main" roads, morphed in 1927 into the Motorspirits Taxation Act which imposed the country's first fuel tax. But it was the National Roads Amendment Act 1959 that largely shaped the funding assistance councils work with today.
Most countries have some form of central government funding for regional and local roads but New Zealand is unique in having the "national land transport fund" gathered from road user charges and petrol tax. This dedicated fund is used to help local authorities manage their land transport activities.
NZTA also measures a council's ability to make its contribution when determining the funding help from central government.
This funding regime provides local authorities with a reliable source of money, based on an objective and transparent formula.
At the sharp end of the debate in the central North Island is Jenny Chetwynd, NZTA regional director Central based in Palmerston North.
Ms Chetwynd said the FAR represented how the NZTA board decided it would proportion its share of that Government funding. And that direction had its foundation in the Government Policy Statement on land transport, a sort of master plan of how much and what priorities had been set for roading.
The state highway network is totally state funded but it's all the other secondary roads criss-crossing the country - and Wanganui - that are funded by a proportional mix of Government funding and ratepayer contribution.
"Every time two people or organisations come together, each will have their own agenda," Ms Chetwynd said.
"We look at this as a proportion funding and not in bare dollar terms. At the moment in Wanganui the road user contribution is 64 per cent with the ratepayers contributing the remaining 36 per cent. And that proportion will vary depending on what the money is being spent on.
"But a review of the FAR was needed because it has worked on a very complicated formula up until now. And remember, we're working with different councils across the country," she said.
"We're trying to find genuineness in all of this and we know it's tricky for all councils," she said.
Wanganui and neighbouring local authorities are worried Government funding for their roading networks is going to be seriously compromised with the FAR review.
Mark Hughes, council's infrastructure manager, said first indications are that Wanganui will have to pare back its budgets for roading and defer works.
He said that, for the 2013-14 year, council would spend $16 million on repairs, replacements and capital works for its road and footpath network. There was also an additional $3 million on emergency reinstatement works in the wake of last October's storm.
While NZTA has confirmed an overall FAR of 53 per cent for the whole of the country, under the current guidelines Wanganui gets a FAR of 65 per cent for maintenance and renewals and 72 per cent for capital improvements, which include things such as bridges. Emergency works are on a sliding scale that ranges from 62 per cent to 94 per cent.
Mr Hughes said it was the resulting shortfall that was the problem, meaning council would either have to fund it from rates or defer or cancel planned maintenance and renewals.
"This is bad news and it means our ability to maintain our roads is severely handicapped."
The level of funding assistance takes into account the size of the local authority's approved roading maintenance and renewal programme, as well as the net equalised land value of a district which indicates that authority's ability to rate.
Ms Chetwynd said FARs may change over time to reflect changing circumstances but not to a degree that would create significant financial difficulty for councils. The setting of the proportion - the funding assistance ratio or FAR - is a statutory duty of the NZTA board and it decides ultimately what proportion of the Government funding each local authority will get.
"Up until now it's been complicated and not based on sound fairness, probably because it's grown like topsy over the last 40 to 50 years," Ms Chetwynd said.
She said NZTA decided to go back to basics so across the country every council was working with same proportional split in funding.
"But we know there are some councils around who genuinely can't afford any significant cut in that funding."
The NZTA was part way through the review and had decided on a split of 53 per cent road users funding and the remainder coming from rates.
"But what we have said is that no-one will get less than 53 per cent of funding. Already there are about 45 per cent of the local authorities sitting well below that threshold now," she said.
"This review is about trying to make the best use of road user funding according to need. We haven't decided which councils need more help. There maybe 10 or so who will be standouts in that regard."
But she did say one district was obvious - Wairoa (East Coast), an area with a network of rural roads in an isolated part of the country and ranking very high on the deprivation index.
To bring fairness and parity to the formula, NZTA had decided to rely on that deprivation index.
"We're trying to get a sense of the wealth of each area regardless of an area's particular rating base. So we're not going to be relying on any rating base as a measure," Ms Chetwynd said.
Even if a 53-47 split is finally agreed on, she said NZTA would still have to make sure that in each local authority its roading programme was "fit for purpose".
"It's a bit like two people agreeing to buy a car. They may have a certain amount of money but then the argument will come down to whether it's a Porsche or a Corolla," she said.
The engagement with local councils had been going on for the past 18 months and she said Local Government NZ had told NZTA that the engagement had been effective.
She acknowledged the agency would not be able to satisfy every council all the time but she said all understood the need to overhaul the system.
"But there's a nine-year lead-in period for the FAR and we have told councils that that proportion from the road user charges would not drop by more than 1 per cent in each of the first three years."