The four-council Wairarapa plus Tararua (Wai+T) combined water services delivery plan has been signed off by the Department of Internal Affairs so all town water service users can stand by for their annual water bills to reach around $4,700 a year within nine years.
In those years, South Wairarapa District Council will be investing $145-$150 million* of ratepayer money and borrowings in maintaining and upgrading water services (drinking, waste and stormwater) across the district.
SWDC water services annual costs across the decade will more than double from the current $2,200, with only Carterton water service users facing even higher bills some $5,100 a year by 2034.
Ownership of the current water assets will be transferred to a multi-council joint water services Council-Controlled Organisation (CCO) under the Local Government (Water Services) legislation to deliver water services to the four districts.
Internal Affairs is adamant SWDC as “a stand-alone water entity would have challenges in financing the $145 million investment” level it faces.
“However, if included in a ‘WAI + T’ Water CCO, this investment requirement could be financed and likely meet the ‘financing sufficiency’ test.
“SWDC, within the (new water services organisation), is projected to generate sufficient revenue to meet the full cost of water services delivery, including operating expenditure, asset renewals, and debt servicing. The new organisation (will be) up and running by 1 July 2027.”
That will see the $145-$150 million work programme begin in earnest, bringing higher debt levels “and (higher) customer pricing” to users.
It notes those customer’s charges would be even higher if SWDC ran a stand-alone in-house water entity (as now).
Being able to access extra debt financing from Local Government’s funding agency will fund water services investment, allow water services capital investment requirements to be funded sustainably, “improve the council’s credit position,” and “create new borrowing headroom for SWDC.”
It adds: “the new water CCO will enable SWDC to meet regulatory standards, uplift levels of service and enable housing growth.”
Major wastewater issues facing South Wairarapa will not be resolved before the new entity inherits them. They include restoring legal sewage connection approvals in Martinborough and Greytown – where they remain suspended as not complying with regional council rules. It also includes work on a new disposal-to-land wastewater scheme currently being planned for Featherston amid growing community concerns.
The new four-council entity will deliver drinking, waste and stormwater services to some 25,000 “connections”, with the transfer of assets (revenue, expenditure, assets and liabilities) to take place by 1 July 2027. Submitters in all four partner council areas approved the new scheme: by 88% in SWDC, 70% in Carterton, 65% in Tararua and 60% in Masterton.
Internal Affairs has legally signed off the scheme, known as a Water Services Delivery Plan, as “a clear plan to deliver water services that are safe, compliant and financially sustainable over the next 10 years.”
“The $150m programme features significant project work in years one-to-five. This has resulted in higher debt levels and customer pricing. In the following years, capital expenditure will stabilise, improved asset condition will reduce operating costs and enhance service reliability, and operational efficiencies of the regional model will be accruing,” Internal Affairs said.
In turn this will “provide the opportunity to deliver lower water charges to Wairarapa and Tararua consumers than what councils could deliver on a stand-alone in-house basis.”
(* DIA uses both $145 million and $150 million as the investment level required by the new CCO over the coming decade).
Dept Internal Affairs assessment: https://swdc.govt.nz/wp-content/uploads/WAI-T-South-Wairarapa-District-Council-11-Nov-24.pdf
