Whakatāne District Council has been briefed on some major decisions it has to make in the next few months about how it charges for and delivers water services.

As part of its Local Water Done Well legislation, the Government has given councils until early September next year to submit Water Services Delivery Plans. Before submitting these plans, councils must consult with the public on what decisions they make.

An overview of five delivery models for three waters organisations was presented to councillors at a public briefing. Council staff sought direction from councillors as to which of five available options they were leaning toward.

Options include creating a ringfenced business unit within the council, either with or without shared services with other councils, and creating a council-controlled organisation (CCO), either by itself or with other councils, which would allow a level of borrowing up to 500 times annual revenue.

The fifth option is a community trust model. However, the council was told by three waters staff that this was not something any other council was considering as a viable option because the entity would not have access to borrowing through the Local Government Funding Agency, which offers councils favourable interest rates.

Infrastructure general manager Bevan Gray described “a perfect storm” of expenses due to several factors.

“A massive spike of renewals” because the bulk of Government-funded infrastructure built by the Ministry of Works before 1989 was coming to its end-of-life.

“You’ve also got a whole bunch of [water] treatment upgrades you’ve got to deliver because of expiring consents, and that’s not considering all the resilience stuff in response to climate change expense to deliver three waters.

“There is more capex needed to spend on three waters than even the 500 percent will allow you."

Mayor Victor Luca said, at present, he was vying for the business unit within council, with shared services.

“It’s always good to share services where you can, and we could retain control. Every water source is unique. We’re not going to be the same as other people."

The council did not know what the overheads would be with a single council CCO and the sacrifice of control of being part of a multi-council CCO with larger councils scared him, he said.

He gave the land transport model as an example of where smaller districts have missed out on funding for projects in favour of areas with larger populations.

He said within the Bay of Plenty Mayoral Forum he had not seen an appetite for creation of a multi-council CCO “except for Western Bay and Tauranga City councils which are already joined at the hip anyway”.

“The others are saying, 'we’ll do their own thing'.”

Deputy Mayor Lesley Immink said while she wanted to see further information about several of the options, she was leaning toward the multi-council CCO option the benefits of which included costs savings due to economy of scale.

“If we can have the right sort of advocacy and lobbying ... we could do more to make sure that we get our share. We’ve got to think bigger, broader – we've got to think about the growth that is coming, across the community.

Councillor Gavin Dennis said he would be interested in a multi-council CCO, “as long as we don’t go in with Tauranga or Western Bay because that hasn’t played in our favour with either the public transport or the transport committee."

Councillor Toni Boynton summed up everyone’s concerns.

“Part of me understands that the multi-council CCO would be the best financially for our whānau, but our ability to have a voice is my concern. Is that what the trade off is? If we lose our voice, will we actually save in the long run?

“It really feels like we’ve got the hospital pass of the century in terms of what we’ve been landed with and without the resource to be able to do this without the impact on our whanau in these hard economic times."

She also had concerns about how the council’s obligations under Te Tiriti o Waitangi would be met in a multi-council entity.

Councillor Nandor Tanczos said he was strongly in favour of the multi-council CCO because it was the only one that addressed affordability.

He felt it was not comparable to the regional transport committee as it would be a professional board rather than a political body.

“You’re relying on a board of professionals whose responsibility is to comply with the regulation.”

Further research and analysis would be done before any decisions are made.

A consultation document is expected to be adopted by the end of March, after which the public will be able to take a look at options and make a submission.

Water rating review looks to equalise costs and services

Equalising costs for three waters services across the district and implementing water meter charges where they are not currently used are among several options to be investigated as part of Whakatāne District Council’s three waters rating review.

At a briefing on the review recently, staff addressed the council’s “jam jar accounting” approach to charging for water, where there are many different systems in different areas of the district.

Equalising rates so people pay for the level of service they receive rather than the cost of work that needs to be done in the area is one of the main options to be investigated.

Murupara pays less than other areas of the district for affordability reasons but requires major upgrades to comply with standards. The Rangitaiki Plains also pays less for drinking water due to historic contributions but much of this is also due for renewal.

Other options to be investigated include adjusting the level of fixed rates versus water meter charges.

The council was mostly in agreement that water should be metered as people would be less likely to waste water if it meant they would pay more.

The council expects to have rates modelling available by February.