Thankfully, Minister of Local Government Mahuta has announced that the Government is sticking to her plan to protect and improve vital public water services in an affordable manner.
The Government will create four water authorities.
Hawke’s Bay’s four territorial councils will participate in the scheme, like it or not.
The scheme will significantly reduce costs to HB ratepayers (see below).
Ownership of water infrastructure will remain in public ownership; councils will collectively own the new water service entities in which they participate.
These assets will be shifted off local councils’ balance sheets, giving them vital headroom to borrow responsibly to meet other community priorities.
And in a concession to feedback over recent weeks, a more straightforward design of governance and accountability will be fashioned in consultation with a working group of local government, iwi and water industry experts.
Requisite legislation will be introduced in December. As already signaled, the new scheme will take effect 1 July 2024.
As Minister Mahuta commented:
“Local councils are trying to deal with the upkeep of aging infrastructure, which is literally crumbling in some of our biggest cities. They face the additional strains of growing population, climate change resilience and extreme weather events, as well as competing for a limited number of skilled workers to do the job.
“It would be irresponsible to pour taxpayers’ money into propping up a broken system, or let households face unprecedented rises in water costs. Currently 43 of the 67 councils do not have the revenue to cover their water services operating expenditures at the moment, let alone once the infrastructure starts failing.”
The Government released Fact Sheets with pertinent information on the status of each region and how local councils would be affected. Here is the Hawke’s Bay Fact Sheet in its entirety.
Be sure to read it — it won’t take long — in preparation for the howls of protest already coming from our local politicians — “shocking” … “dismayed” … “preposterous” … “horrified” … “absolutely devastated” according to our four mayors’ press release issued yesterday. Luckily their comms team has a good Thesaurus!
Here are some key points from the Hawke’s Bay Fact Sheet:
- By 2051 without reform, the average cost per household to deliver these services will increase to: $7,260 in Central Hawke’s Bay; $4,530 in Hastings; $2,540 in Napier; more than $8,690 in Wairoa. With reform, costs are estimated to average $1,260 per year across Entity C areas by 2051. [The Fact Sheet notes that an alternative regional model, as proposed by local officials, would still see household costs as high as $2,870 by 2051.]
- For Hawke’s Bay, the reforms are expected to see the regional economy grow by an additional 246-367 full time equivalent jobs.
- Reform will unlock an additional $248 million for Hawke’s Bay councils to invest in their communities. This is in addition to the Government’s ‘better-off’ funding of $91 million.
- The Fact Sheet notes that with many of the region’s wastewater treatment plants discharging to freshwater, reconsenting these systems to meet environmental standards and cultural expectations will become costly for these communities. HB has 10 wastewater treatment plants provided by councils, with 6 discharging to freshwater and 3 to the ocean.
- In reports prepared for the Water New Zealand National Performance Review, the Hastings and Napier councils reported their pipeline conditions as follows:
- Hastings: 17% of drinking water pipelines are in poor condition, and 9% of wastewater network is in poor condition.
- Napier: 42% of drinking water pipelines are in poor condition, 35% of wastewater network is in poor condition and 10% of the stormwater network is in poor condition.
Good for our wallets. Good for our health. Good for our service reliability. Good for our environment.