Brian Rudman: Metrowater solution is obvious - reduce prices

Auckland City is a recent convert to targeted rates. As a cynic, the theory seems to be that we the ratepayers will feel less grumpy about the ritual annual rate increase if it's split up on an itemised bill, with 1 per cent of it is going to save Mt Eden, 5 per cent to pay for bus-lane paint and so on.

But if this commitment to greater transparency is really any more than a sleight-of-hand, then why is the city now asking us whether we'd mind them spending $50 million of the $61,853,588 they have overcharged us in recent years for water and wastewater charges, on mending the collapsing Civic carpark.

Sure, the perilous state of the carpark roof has been caused, in part, by water leaking through the concrete roof and corroding the reinforcing rods, but that does seem a rather long bow to pull, in order to qualify the expenditure as a"targeted" water-related cost.

Either this $50 million in "retained earnings" should be seen as an overcharge, and refunded or credited to those who paid it, or it should be spent on maintaining and improving the city's ageing water and wastewater systems.

Admittedly it would be nice to get a $350 rebate - the ballpark figure each customer would receive if it was divided up equally - but sensibly, this large windfall should be reinvested in urgently needed infrastructure improvements such as removing the outfalls that pollute the harbour with sewage and toxic road run-off every time it rains.

That's what happened this time last year when regional water and wastewater services wholesaler Watercare Service handed over a $7.1 million "adjustment" to Metrowater after it discovered an embarrassment of spare cash. At the time, in the run-up to the local body election, some politicians were tempted to share it out amongst individual customers at a rate of $46 a household. But sense prevailed, and it was directed toward repairs in the stormwater network.

That said, it is time Metrowater got its pricing right. In May 2003 the council subsidiary was so flush it announced a 10 per cent discount for prompt payers, proudly skiting that with the 10 per cent discount, the average family's water bill had decreased by 4.8 per cent since the 2000 financial year.

But this discount made no dent in the retained earnings piggy bank. On June 30 2002, that held $38 million. A year later it had swollen to $48 million. By June 2004 it was up another $11 million to over $59 million. By March 31 this year, and still three months to go to complete the year, it had grown to nearly $62 million. This last figure was over $18 million more than budgeted. The solution seems obvious. Reduce prices.

While on the subject of profitable publicly owned companies, the drawn-out battle to return Ports of Auckland to full public ownership seems all over bar the shouting. As of last Friday evening, Auckland Regional Holdings had acquired 88.85 per cent of the shares and was a tantalising 1.15 per cent short of enough to be able to compulsorily purchase the remaining 10 per cent and gain full ownership.

Of course the three-month-long cliff-hanger could be over in a flash now if the Government-owned Accident Compensation Corporation, which holds 1.26 million shares, or 1.189 per cent of the total shareholding, was to admit it had lost its attempt to force Auckland ratepayers to pay out more, and accepts the $8 on offer for each share.

As I said a week ago, it's hardly a good look for a Government agency to be playing the speculator at the expense of another public body. The steady flow of acceptances since the offer went unconditional last Tuesday suggests it'll all be over in a day or two anyway whatever the ACC does. But it would have done the corporation's image no harm, in Auckland's eyes at least, to have been seen to be on the winning side.

And with the restoration of full public ownership, lost in 1993 when the Waikato region sold its 20 per cent shareholding, we, as a community, regain control over the future development of the city's invaluable waterfront front door.

Whether it's today, tomorrow or Wednesday, it's going to be a day to remember.