Crs concerned reform could be expensive

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INVERCARGILL city councillors are worried the proposed Three Waters reforms might not achieve the expected efficiencies for the region, imposing higher costs for its ratepayers.

During an extraordinary infrastructural service meeting on Tuesday, the council’s elected members endorsed their feedback letter to the Minister of Local Government and the Department of Internal Affairs as part of the Three Waters reform process.

The Government proposes moving management of drinking, waste and stormwater systems from councils into the hands of four regional water authorities.

Among councillors’ concerns was the robustness of the data used in the proposal modelling.

Invercargill City Council (ICC) infrastructure group manager Erin Moogan said there were significant errors in Invercargill’s data.

ICC’s Three Waters assets were valued at more than $1.2 billion with $16.5 million debt on its water services, not $71 million debt as included in the model, she said.

The letter also raises concerns about efficiency and cost for ratepayers.

Work undertaken by Morrison Low to review the proposals on behalf of Southland and Otago noted that efficiencies of 45% could not be achieved by Entity D as a result of geographic distances and low population density.

Those efficiencies were “likely to be closer to 20%-25%”.

“Utilising an efficiency of 25%… would result in average household costs of $2235 for Invercargill and Bluff households following reform, considerably higher than the costs without reform of $1850.”

Other concerns raised included questions about the assets’ ownership, as the proposed structure of eight shareholder roles to 21 councils would mean the council had no influence on investment in their maintenance or improvement.

ICC would also not have control to stop the assets being sold to private interests by a future government.

Chairman Ian Pottinger gave his personal opinion.

“This model is not for efficiency or for the highest standards. It is… solely designed for cross-subsidisation.”

The model forgot Invercargill people had paid rates for decades to maintain their $1.2 billion infrastructure, he said.

Cr Darren Ludlow said councillors had received feedback from members of the community about the matter, but he did not feel they had enough information to make a decision at this stage.

Deputy mayor Nobby Clark agreed with the feedback but reiterated his personal position that ICC should withdraw its participation in the reforms.

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