Affordability for users was the big elephant in the room, Paniora said.
She said financial metrics for the new CCO meant user charges within 2.5%-3.5% of household income.
Paniora said that meant Northlanders paying between $2888 to $4430, based on Infometrics’ average $115,536 annual household income.
Drinking water and wastewater assets, debts and services for about 100,000 Northlanders will shift from the three councils to the CCO.
KDC yesterday voted to become part of the region’s Local Water Done Well (LWDW) plan at a meeting in Mangawhai.
WDC kick-started the councils’ move toward the regional three-council CCO on July 24.
FNDC councillors will decide on whether to step into the plan today.
Whangārei’s strong drinking water and wastewater asset position has become a hot potato amidst the changes.
KDC chief executive Jason Marris said his council had won the inclusion of cross-subsidisation in the new CCO. This had meant concession from Northland’s two other district councils.
The new CCO’s agreement says cross-subsidisation, which it calls harmonisation, will be considered within three years of the company’s 2027 establishment.
But KDC will be pushing for it to happen as soon as possible within that timeframe.
KDC general manager corporate services Sue Davidson said the CCO’s initial principles required ring-fencing of debt and pricing, with a pathway to harmonisation to be considered within three years of establishment.
“However, KDC will work towards including harmonisation as early as possible in the implementation phase,” Davidson said in meeting agenda papers.
This means Whangārei ratepayers will likely be subsidising those in Kaipara.
If KDC didn’t move on to the regional CCO, it faced a potential Local Water Done Well financial crisis, she said.
KDC could not achieve financial sustainability delivering water services, if it adopted an in-house business unit to do so.
The council is still carrying debt from the controversial Mangawhai sewerage scheme and has little financial room to move for required drinking water and wastewater services fixes to meet tougher new water reform requirements, which are monitored through regulator Taumata Arowai.
KDC initially wanted to shift its council water services into Auckland’s Watercare instead of joining with a Northland CCO.
But Auckland Council turned that move down, before the September 3 deadline for regions to get their water services plan to the Government.
Financial contributions to KDC from developers operating in Kaipara’s Mangawhai, New Zealand’s fastest-growing coastal settlement, have been significantly factored into the new Northland CCO meeting LWDW financial sustainability requirements.
Davidson said there was significant risk around the amount of development contribution money factored into the new model’s financials.
“The initial calculations were considered too aggressive and were moderated on request of elected members. The numbers remain ambitious and continue to carry significant risk of being achieved,” Davidson said.
Paniora said the new arrangements did not regard water as a taonga as had already been established by the Treaty of Waitangi.
She said Māori as tangata whenua had been left out of the conversation regarding the new plan.
Paniora said the only hope for consideration of this aspect lay with FNDC.
She said she couldn’t vote in favour of today’s KDC decision and wanted to wait for the outcome of tomorrow’s FNDC decision.
The new three-council CCO plan for Northland allows an off-ramp for FNDC not to sign up.
In that case there would be a two-council CCO.
Kaipara Mayor Craig Jepson, Deputy Mayor Jonathan Larsen and councillors Mike Howard, Gordon Lambeth, Ash Nayyar, Mark Vincent and Rachael Williams voted to be part of the Northland plan. Paniora and councillor Eryn Wilson-Collins voted not to be.
■ LDR is local body journalism co-funded by RNZ and NZ On Air.
