Logout

Thursday, June 20, 2024
8.9 C
Masterton

ADVERTISE WITH US

My Account

- Advertisement -

Water blunder a drain on South Wairarapa

South Wairarapa District Council [SWDC] is working to understand the full impact of a $51 million blunder by Wellington Water, just days after shaving 0.6 per cent off its proposed rates increase for 2024-25.

Wellington Water [WW] is a council-owned organisation in charge of the region’s water services, including South Wairarapa, Upper and Lower Hutt, and Wellington.

At yesterday’s WW Committee meeting, board members “fronted” a $51m “error we made in delivering our Long-Term Plan [LTP] budgets”.

“We missed out the six per cent WW corporate costs for capital projects. A total of $51m over the first three years, and it is spread over five councils,” WW board member Pat Dougherty said.

SWDC Deputy Mayor Melissa Sadler-Futter, who is the council’s representative on the WW Committee, said $200,000 was unaccounted for in South Wairarapa’s Enhanced Annual Plan budget at present.

“We will be looking to WW to make appropriate savings in our capital works programme to cover these costs, to mitigate the financial risks to our ratepayers and community,” she said.

Dougherty told representatives from WW member councils that he was well aware of the “terrible pressure” on capital and operating budgets during ongoing annual and Long-Term Plan discussions.

“As you nearly reach an end to a series of very tough decisions, we tell you we have made a $51 million mistake.”

Dougherty said an independent party will conduct a review, and a report will be presented to the WW Committee when it meets again in July.

Sadler-Futter said SWDC is “deeply disappointed with the latest news about this mistake”.

“Unfortunately, it is the latest in a string of errors that continues to erode the trust and confidence that is needed in the shareholder relationship with WW.

“It is pleasing to see that an independent review is being commissioned to find out how this mistake occurred and what lessons could be learnt moving forward.”

She said SWDC will use its place on the WW Committee to ensure that the “outcome of the independent review is implemented by WW to see meaningful change and improvement”. SWDC deliberations

The work by South Wairarapa councillors and staff earlier this week had brought the proposed rates rise down to 14.7 per cent for the 2024-25 year.

SWDC chief executive Janice Smith stressed that because the council has shifted from rating based on land values to capital values, individual rates bills would vary from the proposed increase.

The overall increase would be 14.7 per cent but would be divided up based on the new relative property values.

This means each property would pay a share based on how much that property’s value is out of the whole district’s rateable value.

Councillors thanked staff for the work that had been done to reduce overall rates impact on the community.

Throughout deliberations, a spreadsheet indicating the proposed overall rates increase was viewable and showed changes as decisions were made in real-time.

Water services

SWDC consulted on three items in its proposed Enhanced Annual Plan.

The first decision was to determine how much the council should spend on operating and maintaining water services.

Councillors have decided to “maintain current level of funding” with an increase for unavoidable extra costs. This option was supported by 54 per cent of submitters.

Councillors have also included funding for three projects in the 2024-25 year: riparian planting in Greytown [$70k], Martinborough capacity study [$75k], and stormwater modelling [$60k].

Councillor Alistair Plimmer raised a motion to add a further $1 million to the capital expenditure budget for water pipe replacement.

He said the cheapest time to do capital works is now and that not funding it is “kicking the can further down the road”.

“It is not an option,” he said.

Councillor Aidan Ellims agreed and noted SWDC needs to be replacing 2.6km of pipes per year but is currently only doing 1.2km.

However, councillor Colin Olds said SWDC would not make a meaningful impact in solving pipe network problems “unless we have a billion dollar windfall”.

Staff said $1m would likely fund 1km of pipe replacements, but the motion failed to win a majority support.

Water charges to rise

The second decision was to determine the charging model for water use.

Councillors have decided to reduce the allocated quota to 250m3 of water provided to all users [household or commercial] and increase the excess water charges to $2.50 per cubic metre for water used above this.

This was the council’s recommended option in consultation and was supported by 81 per cent of submitters.

The cost of replacing assets

The third decision was to determine how the council should pay for the replacement of assets.

Councillors decided to manage debt through cashflow analysis and only borrow what is needed as it is needed.

SWDC will continue to fund an appropriate level of depreciation to fund future renewals.

This was the council’s recommended option and was supported by 87 per cent of submitters.

Fees and charges

Councillors also adopted its proposed fees and charges for the coming financial year, with the exception of dog impounding fees.

The notable changes from last year’s fees are a rise in refuse and recycling charges, to align SWDC with Masterton and Carterton district councils.

It will now cost $4.90 for council rubbish bags, a rise from $3.

Councillors expressed concern that this may increase fly-tipping incidents, but noted the changes are necessary to combat increased costs on council to manage waste.

Due to inflation, rises were also seen in senior housing, planning and resource management, and building consent fees and charges.

Other additions to the Enhanced Annual Plan

Councillors have also resolved to remove the economic development rate from the rating mode for 2024-25 and return the value to the General Rate.

During Wednesday’s deliberations, elected members also reinstated the Youth and Community Grant Fund at $120k; confirmed $60k for Greytown Sport and Leisure for 2024-25; and included $20k of funding to the Five Towns Trail Trust, subject to other councils’ commitment to the project. -NZLDR

Public Interest Journalism funded through NZ On Air

1 COMMENT

  1. What has gone wrong 😕 with councils over the years 🤔. Is there a RESET BUTTON 🤔. No business could run like this it would be BANKRUPT UNLESS IT HAD POOR RATE PAYERS 😳 TO USE 🏥 😕. I think all the councils need stop ✋ USING CONSTANTS ? PRIVATE CONTRACTORS ? CEOS ? AND EMPLOY 👍 YOUR OWN SYSTEM TO PROVIDE A BETTER SOLUTION THAN THE ONE YOU HAVE. Councils are becoming UNSUSTAINABLE FOR RATE PAYERS IN THERE CURRENT STATE.

Comments are closed.

Emily Ireland
Emily Ireland
Emily Ireland is Wairarapa’s Local Democracy Reporter, a Public Interest Journalism role funded through NZ On Air. Emily has worked at the Wairarapa Times-Age for seven years and has a keen interest in council decision-making and transparency.

Related Articles

- Advertisement -
Trending
Masterton
scattered clouds
8.9 ° C
9.4 °
8.9 °
90 %
1.7kmh
49 %
Thu
9 °
Fri
12 °
Sat
12 °
Sun
11 °
Mon
13 °