Discrepancies prompt rethink

The Central Otago District Council wants water supply charges equalised across the district.
The Central Otago District Council wants water supply charges equalised across the district.
The widening gap between annual water connection rates - Omakau residents pay 14 times more than Clyde residents - is one of the reasons behind a rethink of funding for Central Otago water and wastewater schemes.

Central Otago District Council chief executive Phil Melhopt has written a report on the topic, to be considered at community board meetings this month. He has recommended boards agree to a change in funding, so the cost of schemes is spread equally across all council-run water and wastewater scheme users in the district.

As well, he suggested boards should give up their delegated authority on water services and hand decision-making over to a council committee. Boards effectively made all the decisions on water services in their respective areas, including how drinking water schemes were funded, Mr Melhopt said. Most water schemes were funded by targeted rates, which meant those who were connected to the scheme, paid for the scheme costs.

The targeted rates for water connections this year ranged from $52 a year in Clyde to 14 times that amount, $729, in Omakau. Wastewater annual charges ranged from $261 a year in Naseby to $534 a year in Alexandra.

A decision on a different funding method would come down to ''whether or not it is fair for everyone to pay the same for water services or whether it's fair to ease the cost burden for those paying the highest rates for similar services,'' he said.

The district was facing significant expenditure in coming years to bring drinking water and wastewater schemes up to standard. Some water schemes frequently had ''boil water'' notices because of turbidity and needed to be upgraded and several wastewater schemes were being improved or due for an upgrade to meet improved discharge quality standards.

''In recent times questions have been asked as to the fairness of the wide variation in targeted rates,'' Mr Melhopt said.

Boards had to make their own funding arrangements to cover the capital costs of renewals and upgrades.

''Given the low number of service connections in smaller communities, their ability to absorb operational cost increases or capital upgrades is much lower than the large towns. A $20,000 reticulation network repair in Alexandra would have a 0.4% impact on rates; the same expense in Roxburgh would be 2.2% on rates.''

The funding could be spread across all the wastewater and water schemes in the district, on an average connected cost, Mr Melhopt said. Under the system, based on this year's figures, Alexandra, Omakau, Naseby, Ranfurly, Pisa and Roxburgh would all pay lower combined water and wastewater rates while Clyde and Cromwell communities would have an increase in rates. Another option was to partially fund it at district level and subsidise the scheme costs. He suggested the council's infrastructre committee was the appropriate group to govern a district-wide water infrastructure.

Central Otago Mayor Tony Lepper mentioned the report to Cromwell Community Board members last month and warned them not to ''rush into an opinion'' on the topic.

''Think clearly and get views from the public before you rush into giving your thoughts on it,'' he told board members.

- lynda.van.kempen@odt.co.nz

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