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East Otago's water supplies will receive a $1.8 million upgrade to meet new drinking water standards - but how ratepayers will pay the cost has yet to be decided.
The Waitaki District Council has approved the combining of two drought-prone supplies - Dunback and Goodwood - with the Palmerston supply, all three utilising one take from Palmerston's Mill Rd bore and one treatment plant, providing a cheaper option than upgrading all separately.
Work is due to start this financial year, one of 21 water supplies the council has to upgrade by 2016 throughout the district to meet drinking water standards.
The upgrade will have to be paid for by the 1400 consumers on the three supplies, but one benefit will be more water available, particularly for the Dunback and Goodwood schemes, which have restrictions because only existing demand can be met.
The council has also decided to appoint a new water subcommittee for the combined supply, consisting of two Waihemo Community Board representatives and two each from Dunback and Goodwood.
However, the three communities, community board and the council still have to decide on how to meet the cost of the upgrade, to be paid for by a loan which will be repaid by rates and the ongoing operation of the new supply.
Initially, it was proposed to have one standard rate for all. That would have meant Palmerston's water rate increasing from $318 to $479, but Dunback's falling from $585 to $479 and Goodwood's from $508 to $479.
However, after community consultation, the board said it wanted further options to "more fairly distribute the costs" across current consumers.
Those options will be investigated, discussed and presented as part of the 2011-12 annual plan process, which will give people a chance to make submissions on them.
At present, Dunback and Goodwood have some of the highest water rates in the district, while Palmerston has one of the lowest.
Combining the three schemes and using one upgraded treatment plant at Palmerston was the best technical solution to meet the standards and future growth.
Apart from being one of the cheapest options - the others range from $1.5 million to $2.7 million - it will also guarantee future supplies, even in droughts, for Dunback and Goodwood.
Combining the supplies was "significantly cheaper" than individual treatment plants, estimated to cost a total of $2.4 million, which would still not address future growth in demand.
Upgraded treatment at the Palmerston plant would include filtration and ultraviolet irradiation.