South Wairarapa council’s Long Term Plan forecasts assume no change in the current three waters ownership and operating structure. Wellington Water Limited (WWL) delivers services on behalf of the council which still owns the assets and funds their operation and upgrading through rates income and limited borrowing.
But LTP numbers highlight big problems with the status quo as operating and investment demands mount. For one thing SWDC, under current rules, cannot raise the high levels of debt that will be required from 2028-29 onwards: South Wairarapa’s revenue base is too small.
Alongside the current LTP consultation, SWDC is consulting on its plan to transition the district’s three waters assets into the proposed Wairarapa-Tararua entity. This will support four councils with higher operating efficiency and borrowing capacity than the current WWL structure.
SWDC says the Wairarapa-Tararua model is viable for South Wairarapa using the LTP forecasts for revenue, debt and investment. Assuming the new entity operates from 1 July 2026, its operating efficiency benefits should start flowing from 2029-30. As planned, the entity will send its charges directly to water consumers, which will see an end to targeted district council rates.
SWDC reports WWL modelling to show significant savings to water users over time under the new model – for example, an average annual water charge per connection in 2035/36 of $4,893 which would be 16% lower than an equivalent charge if WWL continues to operate.
There is no analysis yet of the full costs which the district’s property owners would face once such a three waters transition occurred. Only then the new Wairarapa-Tararua charges might be seen clearly in combination with a reduced level of SWDC rates over the long term. Those charges will, however, likely be higher in the initial set-up years, compared with LTP-forecast rates.
SWDC favours the Wairarapa-Tararua model and is due to adopt a plan on 3 September for enabling that transition. The current timetable has the Government announcing its response in November.
In the meantime, the LTP will start with its SWDC rates, expenditure and borrowing outlook firmly in place, including that headline 4.3% rates increase for the year starting 1 July.
