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Issue 1: Funding of council water supplies

The decision

The best way to fund council water supplies.

The issue in brief

In order to upgrade all of our council-owned water supplies across the district to meet the Drinking Water Standards of New Zealand, we will need to invest $21.5 million across the life of our Long-term Plan. Our current funding model requires the users of those schemes to pay the costs associated with them. That raises some affordability issues into the future as some schemes with few ratepayers connected to them will require a multi-million dollar investment, pushing the annual cost into the thousands of dollars.

Our preferred option.

Background

Providing safe, clean drinking water to our communities is reliant on us running and maintaining 18 different schemes around the district. Up until now, the ratepayers connected to those schemes have been the ones to pay the cost of maintenance, upgrades and supply.

However, with new legislation requiring us to comply with Drinking Water Standards of New Zealand, the cost of upgrades means some of those smaller schemes need to have a lot of work done to ensure we can supply them with water that will meet the Ministry of Health requirements into the future.

We have already upgraded the Taupō, Turangi, Mangakino and Atiamuri schemes and the upgrade of the Kinloch scheme is about to get underway. However, we also need to upgrade the 13 other schemes and some of that work has big dollar figures attached to them.

In order to make sure everyone connected to a council supply can access safe, clean, drinking water, we are proposing the cost of providing water to all are spread across all ratepayers. It is the same model we apply to sharing the cost of wastewater.

It would also provide some equity in terms of how water rates are calculated as currently most of the urban schemes are charged at a targeted rate while most rural ones are based on land value.

Options

Check out the detailed analysis of each option below and then have your say.

This option would see the same fixed charged targeted rate for all customers connected to all of Council’s water schemes. This is how wastewater is currently funded in the Taupō District – all ratepayers who are connected to a Council wastewater scheme pay the same fixed charged targeted rate, no matter which wastewater scheme that they are connected to.

Ratepayers who are connected to a scheme and paying a land value based scheme would now instead pay the targeted rate. For those who have water meters installed, it will not change how much they pay. Instead it depends how and when you pay it. This change would mean that you would now pay less on you rates invoice, however you will pay more through your water meter bills.

Water meters would need to be installed at both Whakamoenga Point and Waihaha. Currently these schemes are paying land value based rates, however there is high water use on both schemes due to the large lot sizes and therefore meters are required to ensure users pay appropriate rates.

AdvantagesThe communities of Atiamuri, Hatepe, Motuapa, Whakamaru, River Road and Whakaroa would have a decrease in the amount of fixed targeted rate that they pay.
DisadvantagesA new rating approach that ratepayers may not be familiar with.

The communities of Turangi, Omori, Whareroa and Taupō will have an increase in the amount of fixed targeted rate that they pay, however the communities of Omori and Whareroa will benefit from a move to district-wide funding in the long-term due to lower ongoing costs.
CostsThis option would have no impact on Council debt.
Levels of serviceThere would be no impact on levels of service.

2021/22

The fixed charged targeted rate for all customers connected to all of Council’s schemes would be $532.26.

This option would see our current funding model continue. This means that each scheme would continue to be separately funded i.e. all costs associated with each scheme would be funded by the ratepayers who are connected to the scheme.

AdvantagesRatepayers are familiar with this approach.

Ratepayer equity - the ratepayers that use the scheme pay for the scheme.
DisadvantagesThere will be significant increases to the fixed targeted rate for ratepayers connected to some schemes which will make water rates unaffordable for some customers.

Some schemes are on land value based rating system which is not the fairest system of charging rates. This is because people on land value based rating systems pay water rates on the value of their land, rather than the amount of water that they are using.
CostsThis option would have no impact on Council debt.
Levels of serviceThere would be no impacts on levels of service.

COST

Fixed charge targeted rate

Water Supply Rate Taupo

$500.69

Water Supply Rate Kinloch

$780.25

Water Supply Rate Turangi Township/Tokaanu

$450.92

Water Supply Rate Motuoapa

$624.34

Water Supply Rate Hatepe

$899.21

Water Supply Rate Mangakino Township

$572.37

Water Supply Rate Omori/Kuratau/Pukawa

$396.77

Water Supply Rate Whareroa

$543.12

Water Supply Rate Whakamaru

$1,268.69

Water Supply Rate Atiamuri

$1,074.44

Water Supply Rate River Road

$1,008.00

Land value based targeted rate (average rate)

Water Supply Rate Whakamoenga Point

$1,343.56

Water Supply Rate Tirohanga

$3,285.74

Water Supply Rate Whakaroa

$1,927.14

Water Supply Rate Rakaunui Road

$2,742.05

Water Supply Rate Waihaha

$4,158.18

Water Supply Rate Bonshaw Park

$1,632.23

Water Supply Rate Centennial Drive (untreated)

$21,162.32

This option would see all schemes except for Waihaha and Tirohanga move to a district-wide fixed charge targeted rate. Tirohanga and Waihaha would continue to be on a land based value rate, as per the status quo. Tirohanga and Waihaha are considered to be rural schemes under the Drinking Water Standards of New Zealand, this could be a legitimate reason for keeping them separate.

  • Water meters would need to be installed at Whakamoenga Point under this option because of the large lot sizes and corresponding water use on the scheme.
  • Tirohanga and Waihaha remain the same land value rate as per the status quo.
Advantages The communities of Atiamuri, Hatepe, Motuoapa, Whakamaru, River Road and Whakaroa would have a decrease in the amount of fixed targeted rate that they pay.
Disadvantages Would be a new rating approach that ratepayers may not be familiar.

The communities of Turangi, Omori, Whareroa and Taupō will have an increase in the amount of fixed targeted rate that they pay, however the communities of Omori and Whareroa will benefit from a move to district-wide funding in the long-term.

Treats Waihaha and Tirohanga communities differently from the rest of the district.
Costs This option would have no impact on Council debt.
Levels of service There would be no impacts on levels of service.

COST

2021/22:
The fixed charged targeted rate for all customers connected to all of Council’s schemes would be $532.26. (except Waihaha and Tirohanga)

2021/22:
Waihaha $4158.18

2021/22:
Tirohanga $3285.74

Comparison of separate schemes.

District wide water funding workshop (PDF, 293KB)

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