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Home / Northern Advocate

Whangārei water rates could soar by a third once refinery closes and Three Water costs are added

Susan Botting
By Susan Botting
Local Democracy Reporter·Northern Advocate·
28 Mar, 2022 02:39 AM4 mins to read

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Marsden Point oil refining's end means potential major water rates increase for Whangārei.

Marsden Point oil refining's end means potential major water rates increase for Whangārei.

Water rates may climb by more than 30 per cent as Whangārei District Council faces a $3.5 million double hit from the end of oil refining at Marsden Point and extra Three Waters costs.

The increase is 10 times more than originally planned.

The district council is set to lose $2.5 million in annual Marsden Pt water use income and pay $905k in extra Three Waters costs for the coming financial year. WDC wants to increase water rates by 31 per cent to cover this.

WDC general manager corporate Alan Adcock said the originally forecast 3 per cent 2022/2023 water rates increase would, in the new post-refinery scenario, mean a $3.45m council income deficit by the end of this coming financial year.

A 31 per cent increase - to $3.03 per cubic metre/1000L of water - would mean breaking even.

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"For an average domestic customer this would mean an increase in the annual water rates for 2022-23 from $414 to $518. For the average/medium business it would increase from $7523 to $9568," the council's annual plan said.

WDC had originally planned a $2.38 per cubic metre/1000L of water increase for the coming year.

The council's Draft Annual Plan said not going for the much bigger 31 per cent increase for the coming financial year would mean potential consequences including rates increases down the track.

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It could also mean deferring Three Waters infrastructure investment. Another alternative could also mean reducing maintenance of the existing water network or reducing service levels.

The major water rates increase is one of several major new proposals WDC has out for public consultation for its Draft 2022-2023 Annual Plan consultation opening on April 6 and continuing until May 6.

Marsden Pt has been a water user for decades, providing major WDC income. Water is essential for the steam used throughout the refining process. However, 58 years of oil refining is about to end.

WDC's coming year's Draft Annual Plan said its Three Waters systems for wastewater, stormwater and drinking water were among the most successful in the country.

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It welcomed the implementation of the new water services regulator and new drinking water standards, to help ensure safe, reliable and affordable water services across New Zealand.

However, that meant increased council compliance costs.

Taumata Arowai became New Zealand's new and independent water services regulator in November 2021. Its new drinking water standards and rules will replace New Zealand's current drinking water standards on July 1, 2022. Councils must comply with these.

The plan said WDC will need to invest an extra $905,000 every year in treating and providing water because of Three Waters. It said the larger increase was to make sure council income covered Three Waters outgoings.

Meanwhile, changes in the size of each portion of general household rates make-up are also being consulted on.

WDC wants to redistribute the rates burden among its almost 30,000 residential property owners. This means higher-end property owners could soon be paying a bigger slice of the district's residential rates while those at the lower end pay less.

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The changes will come via changing the portion of the district's across-the-board uniform annual general charge portion of rates.

Without the proposed change, major rates increases will be in store for those in lower-end areas, as their properties saw Whangārei's biggest increases in land value at the district's three-yearly revaluation in November.

Those whose land value increased by more than the district's 51 per cent average faced corresponding rate rises. The Smeaton Dr area's average residential land values rose by 83 per cent and for Ōtangarei the increase was 81 per cent.

These were the district's second- and third-biggest land valuation increases respectively. At the same time, land values for higher-end properties such as in Maunu and Maungatapere increased by 35 per cent.

■ Public Interest Journalism funded through NZ On Air

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