Hint Dunedin's free water will dry up

The Dunedin City Council has warned getting water for free is a concept the public "needs to get away from".

But the council is keen to reassure the public that long-term outsourcing of "this core function" to the private sector is not being seriously considered.

It also says privatisation of the assets is prohibited under the Local Government Act.

A plan to form a council-controlled company to run the city's water and waste systems has firmed as the favoured option for the future.

The plan has been mooted as $236 million of work on water and waste services in the city has been identified in the next decade.

The options for water services are identified in a report by water and waste services manager John Mackie, prepared for today's finance and strategy meeting.

He was asked by the council in January to investigate service delivery.

The report confirmed the council was looking at three options: the status quo, with water and wastewater managed by council staff; either a council-controlled company (CCO) or council-controlled trading organisation (CCTO); or outsourcing services to a private company.

A CCO would be similar in make-up to the Otago Museum or Tourism Dunedin, and would not have the same profit motive as a CCTO, which has been identified by council staff as something that "may not be palatable to the community".

Examples of CCTOs are Delta Utility Services and Aurora Energy.

Mr Mackie said in the report a CCO or CCTO was likely to contribute "significantly more" than the status quo.

After comparing the two company structures, he said: "There are potential advantages in establishing a CCO for the delivery of water and waste services".

Manakau Water had made significant savings since it was set up three years ago.

Mr Mackie said while outsourcing the management of the services was not a favoured option, that was for elected councillors to decide, not council staff.

The revenue arrangements for a company would have to be decided and could be a continuation of a targeted rate, or a charge on consumption using water meters, though the latter would be costly and not practicable in the short term.

"It is important to note that the primary driver for universal water metering is not revenue generation but the conservation of the water resource and an equitable economic tool for managing demand."

Mr Mackie said he thought public attitudes to free water had "matured".

"Most people understand it is a finite resource."

Mr Mackie said the council had not fully funded depreciation of water and wastewater assets for several years, and had ""a significant backlog of renewals to address".

Apart from the $74 million for the Tahuna plant upgrade, there are sewer renewals costing $34 million and water renewals of $18 million.

david.loughrey@odt.co.nz

Bogus number

Yes, even among the hospitality industry dollars spent for a beer and a pie at one Dunedin business are dollars not spent at another in the Otago region. Most of us have only so much money for entertainment including food and drinks. By the time the rates go up and up and up for one hare-brained scheme after another we will have even less. Surely people don't seriously see flights laid on to bring people to the airport, then get picked up by a fleet of buses and taxis which just "happen" to have no other work at the time, to come to a game and then park, or resume their normal passenger carrying work until the game is over when they turn around to collect everyone and take them to catering and accommodation which is sufficient to serve this big influx. That would mean most of the time they are operating half empty, yes that makes good business sense, yeah right.

Stadium benefits

More to the point, how would you ensure that those paying for the stadium get some - or any - benefit from it? Those paying for the stadium are ratepayers (ORC and DCC rates). They include people with no interest at all in rugby and those who are somewhat interested but would not pay the high price to see a game no matter how roofed the venue because they have TVs or would prefer to go to a club or bar. Also included are those whose income has no connection with hospitality or taxi services, such as teachers, bank employees, builders etc etc.

Bogus number

That $6m is a bogus number - as was reported in the ODT the last time a real analysis was done of the impact of a test (removing GST, cost of booze, electricity, etc etc) I think the true number was under $100k.

And remember this money is not coming from outside Otago, mostly it just moves money around the province - we don't have enough spare seats on plane flights in and out of Dunedin to fill more than a couple of 100 seats at a rugby game - and the ORFUs policy of selling tickets locally before allowing others to buy also means that we largely have Otago locals attending games.

But your argument equally applies the same to Hoyts as it does for a stadium - I regularly go down town and have dinner and maybe a beer before going to a movie - would you seriously expect the restaurants and bars to pay Hoyts a kickback? Of course not - nor does your suggestion that they should pay a kickback to a stadium make any sense.

If Dunedin businesses truly thought the stadium was crucial to their income we would have seen them investing in it - we've yet to see the Chamber of Commerce or the Business Round Table ask for special increased commercial rating for the stadium to benefit their members.

test matches bring money

I don't agree Mike. Last time there was a test in Dunedin it bought $6million into the local economy. That's extra revenue for bars/restaurants/motels/retailers. It doesn't matter whether they paid for a ticket to a match they still benefit.

It's user pays

If it's user pays then the people who benefit will be the people who actually visit it and pay for tickets. The people who don't visit won't gain any benefit.

It's an entertainment venue, no different from a movie theatre really. We don't expect the city council to build theatres for Hoyts to use do we? Why should the ORFU be any different? There's a pretty simple test as to whether it's worth building a stadium or a movie theatre. Will enough people attend to make it economical? Will it pay off its principal and cover its running costs? - if it doesn't you shouldn't build it. This is why Mr Farry was unable to raise the private capital he promised us and why he's now dipping into the public purse to build his uneconomical behemoth.

Stadium benefits

How would you stop those that didn't pay for the stadium benefitting from having a stadium in their area? Can you not answer this question Mike?

Not world class

Look again whingy1234, the proposed structure is not world class. It's not even big enough to host A grade rugby tests. It's a very expensive plastic box that will turn out to be the worst thing that ever happened to Dunedin - happy to be proved wrong of course. But the facts speak for themselves, rugby interest and attendance is declining and try as hard as you can, this is a rugby ground, nothing more, nothing less.
No fiscal benefits come from stadia. Do some research and you'll see that quite clearly. Perhaps it is the stadium supporters who need to be quiet and give the ratepayers opposed to funding professional rugby some respite from the crystal ball gazing. By your reckoning it won't be long before you can scream 'I told you so' when the profits are rolling in and the charge disappears from my rates bill.

How?

How do we just charge ratepayers who use the stadium? User pays for the stadium is probably the easiest thing to do - just raise ticket prices to cover the costs.
$340m total cost over 20 years is $17m/year - assuming 20 games a year and 15,000 average people per game that's $56/ticket - see easy! If fewer people show up we just charge them more. Mind you, if it's more like Carisbrook and they only play 10 games a year and only 3000 show up it's going to be $560/ticket - but you'll have a brand new stadium and a roof over your head - that's worth $560 isn't it?
If it isn't we shouldn't be building the thing.

Greedy council

No, it isn't fair that everybody gets charged for the stadium. It will be a drain on Dunedin for a long time to come. It may or may not eventually turn a profit.
The most fair way of funding it is by charging those who clearly stand to benefit or use it. Auckland has done this by charging businesses not individuals for funding.
Why does the council not follow suit?
Charge business owners and users - if they are so sure the stadium will be heavily utilized then where is the problem?
I think most people who support the stadium are probably business owners/property developers, the same people who complain most heavily about the parking charges, which are ultimately required to fund the stadium.

Greedy?

So you think it is greedy to charge people for what they use? You propose that we also charge only those ratepayers that use the stadium? How should we do that? How should we ensure the benefits of having a world class stadium flow only to those that wanted it/paid for it. Bus fares etc can be charged to the users/ beneficiary's easily. Those that get the benefit pay for the service. But it's impossible to do this for a stadium so unless you come up with some decent ideas, keep quiet. Cause whether you like it or not, most of Dunedin will benefit from having a world class stadium, whether you paid for it or not.

"Most people understand it is a finite resource."

It's finite compared with the way unelected Council staff come up so as to pay for yet another monument- greed and folly. If only our elected Councillors were not so eager to embrace these schemes for even more ways to gouge the ratepayers.We don't just need to get rid of the present mayor and council, we need curbs on the vaulting ambition of unelected management, from the CEO down. The trouble with people in such positions is that if they don't come up with projects their own status comes into question and someone might ask, are they really necessary? And worth that much?

"Most people understand it is a finite resource."

This pearler of wisdom coming from the spokesman for the justification of water metering, is an indication there is something seriously amiss. Will the council be able to control the rainfall too? Water will be flowing indefinitely from natural sources, we think.

Water should remain as it

Dunedin residents should not need to pay additional for their water usage. As wingy1234 noted, Dunedin residents already pay for their water through their rates. The Dunedin city council should be using the funds allocated to the absolutely pointless stadium to the infrastructure of Dunedin. Until New Zealand's population balloons into the same numbers as Australia and the infrastructure to support this population has been created to sustain this, New Zealanders should not be forced to pay additonal fees to use water. From my opinion, being a South Islander now living in Australia, the councils of small towns such as Dunedin are trying to create "attractions" such as new stadiums, will then force local residents to pay for them, the very people who neither want them or will use them, so that more overseas visitors are attracted to the area. A new stadium will be absolutely pointles in Dunedin. Carisbrook should be upgraded for the sport purposes in Dunedin. Rates should not increase for residents and water should remain included in the rates fee rather than "pay for it or lose it". The only exception with this is large companies such as Nestle, Cadbury etc should pay for their large consumptions. I imagine that the amount of water they use in a year is enormous. If ths council put this into place I'm sure that these companies themselves would create enough additional revenue for the Dunedin council.

Keep it free

There used to be an old song that said 'the best things in life are free'. Its known now as the 'commons' and they have been gradually sold off, illegally I might add, since the Industrial Revolution. First it was land that was privatised by an act of parliament called the Enclosures, now it is water. If Midnight Oil in their song Blue Sky Mine are right, next it will be air. It's not time for the public to 'get used' to the idea of all the commons being privatised from under us. It's time for us to demand that the things that are common needs for all remain free. We pay rates for the council to administer those 'free commons' for us, not sell them out from under us for the raising of money for follies. Water must, I repeat must remain in the hands of the public or their representative (which is supposed to be the council). To have people unable to afford a drink of water is untenable but it has happened in other areas in NZ when water bills have not been able to be paid. Where has our humanity gone? Or is this it? I hope not for all our sakes.

Core council business

Of course water is a core council business in a way that the stadium is not. It's an area where, if the council is doing its job correctly, there should be no surprises - they should be planning years into the future so that any rating/charging changes are small and incremental.

It's not like our population is suddenly ballooning out of control.

If we're going to make such a basic thing as water "user pays" I think the stadium should be too.

Illusion

It's uncanny the way changes that will make things "better" and "fairer" - like parking charges - or are a compulsory response to rules set by central government. Bus fare rises are embraced by the DCC and ORC at the same time as they have chucked every cent they can get their sticky digits on at the Stadium... ...and the glass brick ...and - you know where I'm going with this, don't you?

Extra water costs

From the ODT article - 'The plan has been mooted as $236 million of work on water and waste services in the city has been identified in the next decade.' Please remind me how much the stadium will cost. Was it $220 million and counting last I heard.
Should a city not invest in infrastructure first, infrastructure it needs to support growth? Extra water charges are just one of the first tools the Council will use to extract extra money to ultimately cover the stadium costs, there will be more. Remember the Council recently aquired the need to raise extra money.

Be very aware

Delta is a prime example of where we don't want our publicly owned assets to go - speculating in Wanaka real-estate, for example.
As for water, a public service can be as efficient as a private, and a corporate structure (as the electricity debacle has proved) is too short-looking for proper reaction to social/environmental need. The corporate structuring, as with 'Tomorrows Schools', is just the precursor to flogging off - it's so much easier to do in that form.
Interesting, that this should be suggested by a paid public servant, ostensibly working on our behalfs, but like so many of the ilk, focused on things fiscal, rather than social outcomes. There will be pressure - increasing pressure, from companies like Nestle, looking to commodify water, and it must be resisted - this leads to the power of blackmail (no pay, no water, die) in an unacceptable scenario.
The CEO of Nestle, in a recent film-festival interview, stated that " people who think water is a right, are 'bangers-on".... "water is a commodity, to be traded like anything else". His argument was that people should work more, to afford it.
In a finite world, the opportunities are of course, increasingly not there. Public ownership is paramount,then. Also, ratepayers should be encouraged to install rain water tanks - I for one think they have been repressed because they are seen as a competitor to the monopoly supply....
They should have been part - even the whole - of the Northern Water approach, rather than the dinosaur that got foisted on the community.

Water is not currently free

Water is not currently free, people pay for it through their rates, so if you pay more rates you pay more for water. The difference if people pay for water is that you will pay for what you use, which is a lot fairer.

Illusion

"It is important to note that the primary driver for universal water metering is not revenue generation but the conservation of the water resource and an equitable economic tool for managing demand." I no longer believe these platitudes, coming as they do from almost every council department. Sim City.

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