New Zealand is entering into a national conversation about how we can deliver better for our communities and our environment in the building and operating of the infrastructure that makes up what we call our “three-waters” – drinking water, storm water and waste water.
And post-COVID recovery is a trigger for us to think about what system of the future could look like.
Central Hawke’s Bay knows better than most why there is a burning platform to change things up.
Historical lack of forward planning – for growth, residential and commercial; underinvestment in renewals; lack of robust skills and knowledge which led to investment in waste water treatment which was not technically feasible; and a continuous chasing of the tail when it comes to legislative compliance.
And a lack of central regulatory consistency and sustainable funding tools outside of rates and development contributions has led to some severe affordability challenges.
A system across local and central government which has been fragmented and political has created these many challenges.
But three years ago, in Central Hawke’s Bay we adopted #thebigwaterstory – a concerted effort to get on top of these issues, nearly doubling our capital investment. We have made incredible progress with over 120% of our renewal requirements being spent each of the last 3 years, but it is still very much like the old saying about how to eat an elephant … one bite at a time. And right now the elephant is still huge.
We service seven settlements in Central Hawke’s Bay with drinking water. We service six settlements with waste water treatment. And four settlements with formed storm water networks. And all with less than 4,000 households connected to those services. The cost per connection is increasing, and increasing substantially every year.
Every connected household is now paying over $1,600 per year just to be connected to drinking water and waste water – with storm water and ALL other council services on top of that. We estimate that with upcoming compliance requirements for our waste water this could easily double in the next three years, and possibly even double again in the following five. This is not sustainable.
Ironically, although historic underinvestment is an issue, that underinvestment is actually a minor part compared with the challenge of replacing and/or upgrading so much infrastructure up to new regulations over such a short period of time. If we could be sure that what we were doing was ACTUALLY going to last over 50 years, then investment decisions would be slightly easier. And as we consider climate change impacts, this forward planning of investment decisions is even more important.
I am pleased to say that plans are coming together to reduce our number of waste water treatment plants from six down to three. And the full connection of drinking water systems between Waipawa and Otane is complete, with the possibility of connecting reservoirs between Waipawa and Waipukurau an increasing reality. This will all make ongoing operating costs far less of a burden over coming years.
The confirmation of stimulus funding this week from the government in this post-COVID economy is very welcome. Every part of the Hawke’s Bay region is reeling from investment requirements across this 3-Waters infrastructure – from residential expansions, to potential increased treatment requirements for coastal waste water discharge, the pursuit of chlorine-free drinking water, coastal outfalls, storm water overflows, saltwater incursions in coastal properties, and the list goes on.
There are many ways that we can transform delivery.
Part of the solution may be in a reorganisation of delivery to enhance the effects of scale. Part of the solution may be in consolidating expertise so that we are not re-inventing design and process multiple times over. Part of the solution may be in more consistency of regulatory approach from government and their regulators.
And part of the solution may be in holding assets and debt on a separate balance sheet to give us all more room to service debt, accommodate growth more quickly, explore additional funding options, de-risk the remaining council business and provide a buffer to deal with large scale emergencies.
The exciting thing is that this government has seen that it is impossible for them to design something that would work across the country without partnering with the 67 district and city councils across the country. Whangarei is different to Whanganui is different to Wairoa is different to Waipukurau.
So application of the stimulus funding announced this week by the government will be associated with 12 months of a “co-design” process between Local and Central government on how we could all do this better.
Hawke’s Bay is a clear leader in this national conversation as we started thinking about this as a region over 18 months ago. Acceptance of the stimulus funding into our economy is going to be conditional on us opting-in to a partnership with central government over the next 12 months.
Councils are the owners of this infrastructure on behalf of communities – over $2 billion worth in the Hawke’s Bay region – and it is crucial that we enter this conversation about change with an open mind, but with the future well-being of our communities at its centre.
Stay tuned to see how this could play out to give us better community, health and environmental outcomes, and more efficient and cost-effective service from our community-owned infrastructure.