Water rates in Central Hawke’s Bay are set to triple over the next decade, and angry residents are wondering how they are going to pay.
By 2035, Central Hawke’s Bay residents connected to the council’s water supply could see an increase per household from about $2500 a year to more than $7000.
The hike is because of a proposed regional water entity under the replacement for the Three Waters Policy. The new ‘Local Water Done Well’ scheme sits alongside legislation mandating councils decide, with their communities, how it meets the new standards Government has set for water delivery and quality of infrastructure.
Bob in Waipawa is shocked by the figures. He told RNZ that it is simply unaffordable for so many.
“It’s extreme - and it also means there must have been a significant failure. It’s unheard of - and as if the cost of living isn’t already through the roof.
“We probably can weather it, we’ll cut down on any extras... but for people who can’t weather it, it will really badly impact them - anyone on fixed income such as a disability or pension,” he said.
“I think it’s disgusting. We have very high rates here, the second highest in New Zealand and we get nothing for it - so this is another insult.
“You’ll notice a lot of houses for sale right now, people are moving because of rates being hiked up all the time. It used to be a cheap option to live here, but now we pay more rates than Hastings,” she said.
Debbie Stewart Photo / RNZ
Another resident, who did not want to be named, shared Bob and Debbie’s fears.
“I’m quite concerned about it, I think people are struggling already just paying their rates fees as they are... and if they’re projected to rise it’s just going to take more money out of people’s pockets,” he said.
Bob wanted to see the Government offering incentives for tax and ratepayers who take more responsibility – such as conserving water and reusing grey water.
“If someone isn’t doing anything, then their rates should be higher. There should be incentives to improve and reduce, and make the region better – rather than a blanket cost that negatively impacts everyone,” he said.
‘This is intimidating’
Central Hawke’s Bay District Council (CHBDC) said the water rates were derived from modelling completed for business cases for each of the three options.
It said costs were determined from what each council indicated it needed to do in their long-term plans. And while there were still a number of details to be worked out, it has been assumed each council would pay its own way for its water infrastructure.
Mayor Alex Walker said this was the basis of the numbers presented to the community – so everyone can clearly see what costs and increases are looming over the next 10 years.
“We’re in a perfect storm in Central Hawke’s Bay. We’re having to invest in catch-up from past underinvestment, meet growing regulatory expectations and invest for the future all at the same time,” said Walker
She told RNZ a tripling of water rates by 2035 would be very tough for residents.
“This is intimidating for a householder to think about what $7000 of just water would mean for their household,” she said.
She said it was also intimidating to deal with the huge list of problems that CHBDC had on its plate with its “three waters” infrastructure, which is the combined services of drinking water, wastewater, and stormwater management.
“Twenty-five per cent of our drinking water piping network is at high risk of failure, 40% of our wastewater pipe network is at high risk of failure. We have two water reservoirs that feed our main towns, both of which are over 100 years old and earthquake-prone and need replacement.
“We have six wastewater treatment plants – none are compliant and one is under an Environment Court order, and all needed to be upgraded. And all of this is in the context of a growing community,” said Walker.
Central Hawke's Bay Mayor Alex Walker. Photo / RNZ
Under the new “Local Water Done Well” scheme, the Central Hawke’s Bay District Council has three options to choose from: A regional controlled organisation, a stand-alone district council controlled organisation, or an in-house delivery unit.
The mayor said the council’s preferred option was the regional model.
“If we are going to make inroads into these huge numbers, then we need to be in a bigger entity, we need a team approach.”
Walker also acknowledged that the cost to councils and ratepayers would have been “significantly less” under the previous Government’s Three Waters policy. But she said being part of a much larger water entity with about 22 councils, rather than four, would have been challenging, so this latest scheme was the best way forward.
“It’s very clear to the councillors and I that the model is not a silver bullet to our affordability issues, but in the current changing legislative and regulatory environment, we are stronger together as Hawke’s Bay.”
Submissions on the new water infrastructure scheme are open until June 12.
Households and businesses to meet the costs
A spokesperson for the Department of Internal Affairs (DIA) told RNZ that as Walker has pointed out, Central Hawke’s Bay District Council, like many councils around the country, required major investment in water services infrastructure to address underinvestment.
“The cost of the required investment will ultimately be met by households and businesses, whether that’s directly via council rates or water charges from council-owned water organisations,” they said.
Local Water Done Well is the coalition Government’s plan to address New Zealand’s long-standing water infrastructure challenges, and the DIA said it recognised the importance of local decision-making, and flexibility for communities and councils to determine how their water services will be delivered in the future.
“It does this while ensuring a strong emphasis on meeting rules for water quality and investment in infrastructure.”
The DIA said the scheme included key features and significant differences from the previous Government’s policy, which were more supportive of affordability for households.
“The previous Government’s policy imposed mandatory amalgamation of council water services and assets into a handful of large water services entities. It relied on significant efficiency gains and price harmonisation, with some communities within each entity’s service delivery area subsidising costs for others to keep household costs low.
“This is not a requirement under Local Water Done Well, instead it is up to individual councils and regions to determine what the best arrangements are for their communities.”
The DIA said an arrangement the coalition Government secured last year with Local Government Funding Agency (LGFA) supports affordability for households and other users.
“It gives council water organisations under Local Water Done Well better access to financing. This allows them to spread the cost of required investment for long-term capital improvements over future users of the asset, rather than front loading the costs on to the current ratepayer base.”
Local Government Minister Simon Watts agreed that water rates rises for residents would not have been less under Three Waters, and he said councils are progressing well with their new plans.
“They’re putting those plans to me in September and when we receive those, we will review them and make sure they are fit for purpose.
“I don’t believe they [residents] will be paying more under our scheme,” said Watts.
