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Otago Daily Times
2 days ago
- Business
- Otago Daily Times
‘Scary' 30% rates rise on cards
Councillors hear an update on Local Water Done Well proposals at a workshop this week. PHOTOS: ANDREW ASHTON Ratepayers could face a "scary" 30% rates rise in just two years if the Waitaki District Council's plans for an in-house water services unit are accepted. That was the stark reality laid out for councillors at a workshop this week to plan how to move forward from a decision two weeks ago to opt out of a joint water entity with three other Otago councils. Mayor Gary Kircher said he and the rest of the council were committed to making the best of that decision, which now involved sending a draft plan to the government by the end of July, before a full water services delivery plan (WSDP) was presented to the Department of Internal Affairs in September as required by the government's Local Water Done Well legislation. "We have to make sure that we do set up our in-house option as best as possible and I won't tolerate anyone undermining that." However, the size and cost of that was put into perspective by two Department of Internal Affairs (DIA) representatives at the workshop. They reiterated their points from a previous meeting that the in-house model would have to meet the government's financial stability rules for a period of 10 years, even if the plan involved a joint venture with other authorities before then. The in-house model would have to stand on its own merits for a 10-year period for assessment purposes. If those rules were not quite met, a facilitator could be appointed to work alongside the council to help the plan meet the targets. Department of Internal Affairs representatives Marlon Bridge (left) and Warren Ulusele at the workshop. The other, "more intrusive" option was to send in "the specialist", DIA representative Warren Ulusele said. "That person is appointed in the council, they make decisions on behalf of the council. They can look up across the council finances, potentially look to redirect funding from other purposes and redirect it back into Three Waters investment. "They can look at the revenue streams and determine that they need to go up. So I point that out, not in a threatening way, but just to be absolutely clear about this conversation around control and that's concern, again, not just this council, consultation across the country and it's understandable. "That person is appointed by the minister with one objective and that is to develop a financially sustainable plan. They will look to do that as quickly as possible and their focus is meeting growth. So they're not looking across the range of responsibilities you have, the range of considerations you have." WDC chief financial officer Amanda Nicholls then laid out the council's finances saying they would look "scary" at this stage of the process, pointing out external debt per rateable property would significantly exceed the benchmark of $4000, while debt continued to grow over the years. However, it would require a rate rise of about 25.61 % in the 2028 LTP year to fund the in-house unit, and then rate rises of about 4% for each of the following years. All those rises and the 2028 rise could also increase by a further 5% if the council, as was likely, was required to fund depreciation of water assets. When it came to council debt, the workshop heard the WDC would breach its debt cap in 2035 and every year thereafter, potentially requiring further rate rises to lower it. Two weeks ago, Waitaki district councillors voted to exit the Southern Water Done Well partnership with Clutha, Central Otago and Gore in favour of an in-house water services delivery unit. The joint arrangement was previously the council's preferred option before it was put to public consultation. Public consultation across the four councils drew in over 1000 submission with the in-house business unit model the preferred option in Waitaki (54%) and Clutha, while only 26.7% supported the joint entity, most popular in Gore and Central Otago. Prior to that the Department of Internal Affairs said joining a four-way, multi-district water company was the "only viable option" for the district. The DIA representatives this week said they had heard nothing to allay their "concerns" over the council's chosen path, saying they could not see a pathway for the council to develop a plan that was credible. "Hopefully, it'll come to light as you uncover more of what information discloses as you put more of the facts into the equation." The council intends to hold weekly public workshops, videos of which will be posted on its website, every Tuesday this month to keep people up to date with progress. A recording of this week's meeting, with chapter points for each section, the presentation given by the council's finance team, and the letter from the DIA are all available on the council website. "Council encourages the community to watch the videos, read the presentation and the letter from the DIA to be fully informed about the development of the WSDP," a council statement said.
Scoop
15-07-2025
- Business
- Scoop
Ruapehu And Whanganui To Form Joint Water Services Entity
Ruapehu District Council (RDC) will join with Whanganui District Council (WDC) to form a two-council Water Services Council-Controlled Organisation (WS-CCO) to deliver future water services under the Government's Local Water Done Well reform programme. RDC had voted to support the two-council WS-CCO model at its meeting on 9 July, with the decision contingent on WDC confirming its preference to partner with Ruapehu. That confirmation came today, with WDC elected members voting 8–5 in favour of the joint model. Chief Executive Clive Manley welcomed the confirmation and said it was an important milestone that enables both councils to begin work on the detailed planning and implementation. 'This has been a long and complex process, and a significant amount of work has gone into getting us to this point,' said Mr Manley. 'Now that we have clarity and agreement from both councils, staff can progress the necessary steps to implement the new water services delivery model. Until we had confirmation of our partner council, there were key aspects we simply couldn't move forward on.' The immediate priority will be the development of a joint Water Services Delivery Plan (WSDP) with WDC. This plan must demonstrate how the proposed two-council WS-CCO meets the Government's legislative requirements - particularly around financial sustainability - and must be submitted to the Minister of Local Government for approval by 3 September 2025. 'Given ministerial approval of the WSDP, Council staff will be working closely with Whanganui to operationalise the new WS-CCO as quickly as possible,' said Mr Manley. 'The target is for the WS-CCO to be fully operational by mid-2027. In the meantime, water users in Ruapehu will continue to be serviced by our existing provider, Veolia, with no change to service levels.' Mr Manley noted that WDC had also voted to include stormwater services in the new WS-CCO. Ruapehu is still considering whether to transfer its stormwater services or retain them in-house. This decision will not impact the establishment of the WS-CCO. 'We'll make a decision on stormwater in due course, but it doesn't prevent us from moving forward with the rest of the WS-CCO implementation,' he said. Mr Manley added that this partnership builds on the strong history of collaboration between the two councils. 'This new water services partnership adds to a growing list of shared services between Ruapehu and Whanganui. Both councils are committed to continuing to explore opportunities that improve efficiency and reduce costs for our communities.'
Scoop
07-07-2025
- Business
- Scoop
Council Votes To Establish New Water Services Organisation
Marlborough District Councillors today approved the establishment of a new water services organisation (WSO) to deliver drinking, wastewater and stormwater services to the people of Marlborough. The decision continues the Local Water Done Well process, as mandated by the current Government. Mayor Nadine Taylor said it was a very important decision for the region. 'We have decided to take a once-in-a-generation opportunity to do things differently to build better three waters infrastructure and provide greater intergenerational equity, spreading the costs over the long term.' 'The Government requires councils to financially ringfence their water services and by setting up a new, water-focussed organisation it will be easier to sustainably deliver efficiencies and savings for residents on Council's drinking and wastewater supplies.' 'Costs will be spread over a longer period of time through borrowing, leading to lower water charges when compared to retaining water services internally at Council.' 'Other notable benefits are the new WSO will have a singular focus on the delivery of water infrastructure and be better positioned to attract the specialist staff we will need in the future.' 'By removing three waters debt from Council's books, we will have an improved ability to deliver other key Council activities to support the Marlborough community, including responding to and funding unforeseen circumstances such as natural disasters.' Mayor Taylor noted that almost all of Marlborough's townships need upgrades to pipelines, pump stations and wells, with treatment plant upgrades required in Blenheim, Havelock, Riverlands and Awatere. 'Blenheim, Havelock, Riverlands, Seddon and Renwick also need wastewater upgrades. Many of Picton's and Blenheim's stormwater assets have an expected life of less than 10 years. In addition we have requests from the community to provide new water reticulation services - for example in Ward, Rarangi and Dry Hills in Blenheim.' 'While Council has done a good job of building and maintaining its current three waters infrastructure, a big step change is required if we are to face head-on the challenges of the future,' she said. 'This step change is best delivered through a new water services organisation.' Council received 44 submissions on its Local Water Done Well proposal. The WSO would be incorporated from 1 July 2026 with a one year transition to full operations from 1 July 2027. Marlborough District Council will be its sole shareholder, appoint its board of directors and set its direction via a binding Statement of Expectations, holding it accountable to the people of Marlborough. Council will also establish a water services governance and oversight committee made up of the mayor, the three committee chairs and chief executive. Notes The Government's Local Water Done Well process requires all councils to develop a Water Services Delivery Plan (WSDP) by 3 September 2025 which describes how drinking water, wastewater and stormwater services will be delivered in ways that are financially sustainable, meet regulatory quality standards, meet water quality standards and support housing growth and urban development. Other considerations include: • New ring-fencing rules that require water delivery services to be financially separate from Council's other functions and activities. • Water services being subject to new economic regulation and a consumer protection regime. • Access to the Local Government Funding Agency to help fund the needed investment in water infrastructure. By 2034, $410 million of investment is needed in Marlborough's water infrastructure. The renewal list for pipelines, pump stations, treatment plants and dams is considerable. About $45 million of water assets, $20 million of wastewater assets and $45 million of stormwater assets are due for replacement within the next nine years. The renewal profile will likely increase as assets built in the 1950s and 60s, including much of Blenheim and Picton's stormwater network, requires replacement over the next 40 years.
