ODT on “fiscal creep” + the 3 Waters bonanza

### ODT Online Sat, 30 Jan 2010
Editorial: Restraint inertia
It is good finally to see some vigour coming from Dunedin City councillors as they examine ways to tackle spiralling rate increases, even if such efforts are years too late. The mayor and councillors for far too long have acquiesced to plans and proposals that have ratcheted up costs.
Read more

Related Post:
20.1.10 ODT sounds the warning!

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### ODT Online Sat, 30 Jan 2010
Water infrastructure challenges identified
By Chris Morris
Climate change, peak oil and a $1 billion bill are just some of the challenges identified in the Dunedin City Council’s 3 Waters strategy document. However, the 3 Waters Strategic Direction Statement 2010-2060, to be considered at Monday’s infrastructure services committee, also outlined the high-level thinking behind plans to tackle each, as well as identifying opportunities.
Read more

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### ODT Online Sat, 30 Jan 2010
City’s $1b water bill
By Chris Morris
The Dunedin City Council is facing a billion-dollar bill to maintain existing water services over the next 50 years. The forecast costs were outlined in the council’s “3 Waters” strategy, along with a warning “trade-offs” would be needed – reducing funding for some non-essential water services – to minimise the effect.

Cr Butcher said the [“3 Waters”] document showed the council’s decision to invest in the Forsyth Barr Stadium, despite concerns held by some about the financial position of the council, was “coming home to roost”. She also accused staff of deliberately withholding details of the pending bill during earlier stadium deliberations. “I’m pretty upset about it . . . We should have had this information before we made the stadium decision, because it makes a huge difference.”

Read more

>> Agenda and reports for the Infrastructure Services Committee meeting on Monday 1 February, Edinburgh Room, Municipal Chambers, commencing 2pm.

Posted by Elizabeth Kerr

21 Comments

Filed under Economics, Politics, Project management

21 responses to “ODT on “fiscal creep” + the 3 Waters bonanza

  1. Elizabeth

    ### ODT Online Fri, 29 Jan 2010
    Councils urged to restrict spending
    With local authority rates rising last year at three times the rate of inflation, a business-oriented lobby group says ratepayers expect more frugality from councils this year.
    The Local Government Forum’s members include Business New Zealand, the Electricity Networks Association, Federated Farmers, the Business Roundtable, Chambers of Commerce and Retailers’ Association.
    Read more

  2. Phil

    I can’t believe the “Wailing Wall” response from the 2 councillors mentioned in the article. If they didn’t see the 3 Waters report coming, then they don’t deserve to be in office. Smacks more of election year grandstanding to me.

    The issue surrounding the poor condition of water and wastewater reticulation pipes in the city has been around for years. I recall there was a big fuss made over it back in Mayor Suhki’s day. I believe an estimate of the cost was given at the time of somewhere in the tens of millions of dollars to replace the entire network. My poor memory is swinging between $25m and $60m. Did people think this was just going to go away? Obviously.

    Well done to John Mackie in forcing the reality check of neglected core services out into the open. The public trumpeting of the supposed “A Grade” water supply in the city has always been total rubbish, and completely meaningless. That’s the grading at the treatment plant, not at the tap. It ignores the entire reticulation system. It’s about as relevant as grading of the raindrop as it falls into the catchment lake. The only grading that counts is the one at the point of consumption. And I can’t see where anyone has graded that.

    Sorry Fliss and Dave. But if you didn’t know about this, you should have. Neither of you are stupid people.

    • Elizabeth

      Maybe the B for billion word scared them senseless. They’ll be OK after a rest up this weekend; still got plenty of time to do their sums before the Monday meetings start.

    • Elizabeth

      ### ODT Online Mon, 18 Oct 2010
      Pipe upgrade urgency signalled
      By Stu Oldham
      Dunedin’s water pipes must be upgraded before oil shocks intensify and worldwide energy prices surge, a draft paper prepared for the city council suggests. The paper warns potentially expensive improvements could be much harder to afford in the maelstrom of supply crunches and price spikes as the world grapples with peak oil.
      Read more

      • Elizabeth

        ### ODT Online Wed, 11 Jan 2012
        Water pipes crack as dry clay shrinks
        By Chris Morris
        Dunedin’s water mains network is starting to crack under the pressure of a long, hot summer dry spell. Dunedin City Council staff and contractors have been kept busy repairing cracked water mains caused by rapidly drying ground conditions, just days after it was confirmed Dunedin had experienced its driest December on record.
        Read more

        http://www.odt.co.nz/news/dunedin/193294/dunedins-december-driest-record
        http://www.odt.co.nz/regions/otago/193434/farmers-start-feel-effect-dry-conditions

        • Elizabeth

          ### ODT Online Thu, 19 Jan 2012
          Renewals up to $26m per annum
          By Chris Morris
          The Dunedin City Council has a financial mountain to climb to fix the city’s ageing water infrastructure, amid warnings old pipes at risk of failure could be a threat to public safety. A report by council water and waste services (WWS) staff warned the state of the water network meant annual renewals spending would have to more than double, to about $26 million each year, for the decade from 2025-35.
          Read more

          DCC spending (via ODT)
          • $10 million this year on water renewals
          • Already budgeted to rise to $20 million a year by 2021-22
          • Will have to reach $26 million a year for decade from 2025-35
          • Part of estimated $820 million bill to replace more than 50% of city’s water network by 2060

          [instead DCC built a loss-making rugby stadium]

  3. Stu

    I wonder if anyone has ever investigated in any depth adverse public health outcomes in the Dunedin area over long timescales due to issues in the water reticulation system? “There’s something in the water down there” all right.

  4. Phil

    The issue surrounding the decayed water reticulation system has been urgent since before Sukhi’s time. It was rejected during her tenure due to the unaffordability of the scheme. Around $60 million from memory. Starts to look a bit better after a certain $300 million has been waved around lately.

    I’ve long been annoyed over the DCC staff crowing about having an A Grade water quality rating for the city. Self-rated, one should add. It was even hauled out in desperation by some during the election campaign. Not that I blame those campaigning, they were simply repeating what they had been told.

    The fact is that the water quality in Dunedin is NOT A Grade. In order to receive an A grading, water has to be completely secured from contamination from the source to the tap. Deep Stream runs, unfenced, through stocked farm paddocks. So it misses straight away. The justification from DCC staff is that they INTEND to fence off the several hundred kilometres of the entire watercourse. One day. Then it will be A Grade. So we might as well save time and call it that now.

    Then we come to the method of testing itself. The water is tested, not at the tap, but at the treatment plant. Before the water enters the failing reticulation system. No one knows what the grading is of the water that you and I finally get to drink, but we know that it must be worse than the grading at the treatment plant, which is something less than “A”.

  5. kate

    There is a far bigger issue with water in Dunedin – we treat it as valueless and therefore not as a finite resource. I have championed a view that looks at water as part of a 5 water strategy and where we include potential for off peak use of water for irrigation or catchment recharging – that requires a very different mind set and planning a system that does not run water out of its catchment with no possibility of reducing flows and discharges it elsewhere when it is not required. Until we value, and that does not mean charge, it means appreciating waters many uses and values, then we as a city will fail to look at all options for utilising a scarse resource. Coming from an area of dryland farming I do not accept the view expressed by some during the campaign that we are not water short.

    I want to have the debate at least before we go further spending on a shortsighted project that reduces our opportunities in the future, albeit no doubt cheaper in the short term.

  6. Phil

    I’m not against the idea of water metering, Kate. Providing all current water charges are removed from the current rates bill. So it doesn’t simply become a secondary source of revenue gathering.

    We’ve often talked about this at home. We live in a reasonable value 180 sqm house, just the two of us. Our neighbours next door live in a smaller house of a slightly lower value. Mum, Dad, and 4 kids. I would guess that their water usage would be probably 4 times our water usage, yet we pay more for water every year because of the value of our property.

    From a purely financial point of view, I guess it all evens out for the city. The total rates revenue for water presumably covers the total cost for providing that water. But, from a resource point of view, there is no active incentive or disincentive for the end user to be proactive in water conservation. Metering would allow for individual homes to see how their lifestyles are affecting the resource and, more importantly, their wallets. It’s money that will force people to change. Which would then lead to lifestyle changes benefiting the individual financially, and benefiting the community long term by ensuring that water usage remains at a long term sustainable level.

    I also don’t believe that water is an automatic right for commercial activities. By that I mean mainly farming activities. If some farmers are using an unreasonable amount of water to irrigate, then maybe that land is no longer suitable for farming. Some hard decisions are going to have to be made to ensure a sustainable water supply. They should have been made before now, but I’m very hopeful that progress will come soon.

  7. kate

    Good points on metering Phil and I am open to that sort of discussion. I can assure you that ORC are very clear about quantities on farm land and it is hard to get and very little chance of it being overused.

    Irrigation everywhere is not the solution, but if we want locally produced food and productive land and we are looking at more extreme weather events we can pay more for less production or we can look at how we can produce more or probably ensure we can take the highs and lows out by building water storage capacity for the river and its values, that can also be used recreationally and or for irrigation. We seem to have a one use model instead of looking at variable options depending on the climate and demand.

    Phil I hope you do not think keeping gardens green is more important than some commercial uses or even environmental demands on the river? At the moment we cannot balance those demands. We have not developed those options. We haven’t even explored them, for now or for the future.

    • Elizabeth

      Hope you’re not implying more dams, Kate? Reduce Dunedin demand for water, monitor and conserve it. Restore watercourses. Restore/create vegetation and habitats that retain and purify water [starts listing everything we used to do before we took the wrong turn to consumer lifestyles…]…live simply, keep the footprint small. Think.

  8. Phil

    Valid point there, Kate. Having a green lawn around your house is also not a right. And if (heaven forbid) we had to choose one over the other, then I would support food production. And also, as you quite rightly say, maintaining the environmental balance of the water sources. Having a green lawn is good for the social wellbeing of the community, but there are other ways of achieving that goal. Whereas some other activites involving water have no alternative means for survival.

    I’m all for making us (as a community) as self sufficient as possible, by producing our own food and having less reliance on outside influences. I think we need to be smart about it by maximising what is able to be maximised while maintaining the necessary resources, and cutting loose those things which are doing more harm than good to our community. Maybe it means that we need to start getting used to chicken instead of beef ? Or something like that.

    I have little sympathy for the newly established dairy famers who have suddenly moved from extensive to intensive farming purely for personal gain. I appreciate that it is difficult for local government to control the activity when there is so much support coming from central government and the monopoly exporter. In my opinion it’s a timebomb waiting to go off, and indeed has already started exploding in Southland and the central North Island where there is not one single open watercourse that now meets drinking water quality standards.

    Worth us remembering that it would only take a few senior disgruntled members of the EU to make that market almost impossible for us. Or for the USA to subsidise their exports to price us out of the market. Our export cash cow (pardon the pun) is very much in the hands of major world players. The big advantage that we have had up until now has been our environmental image, which makes resource management all the more vital. News of the attempt to bring in those highly intensive dairy farms into NZ a few months back had reached the association of dairy farmers in the UK, who were all set to go with a EU wide advertising campaign had those farms been approved. I don’t think people realise how narrowly the country dodged a bullet there.

    I agree that sustainability should also be applied to population. We might have suitable land left for housing development, but it starts becoming less attractive when there are trucks rolling in over the Northern Motorway every morning carrying food. The bigger we become, the more reliant we become on outside resources. We don’t want to be the biggest city in NZ, our resources simply couldn’t handle the demand and we’d end up worse off for the experience. I would much rather we were the best little city in NZ (apologies to Dolly Parton et al).

  9. kate

    I will not malign our dairy farmers here – for if it were not for them at the moment NZ would financially be far worse off, and moreover I personally blame the last governments conservation policies for the intensification and subsequent degradation of rivers – they thwarted the balanced sheep farms by land tenure reviews. It was an obvious result that changing the balance would bring about intensification on the lowland. It was not an issue that DOC then wanted to consider.

    However the issues of irrigation that I am talking about are more about resilience to climate change and yes storage and potential energy developments might be the answer Elizabeth, but we should be looking at multi use, off river storage that gives the City some more options than we have now, for environmental, recreational and yes food production. We have too long looked at water as one use only when it can be managed with a view to all its potential and managed collaboratively. And there are good examples of that working to improve the river values. The Maniototo Irrigation Company has meant better flows in the Taieri River and the Opuha scheme has meant that the river always flows. It comes down to some good people leading with principles and caring. Most farmers are like that.

    • Elizabeth

      I think your comment on dairy farmers is a wee bit irresponsible, Kate – I will malign them instead, given ORC’s figures on non compliance. Dairying is not the answer to our export plight, the answer is and always has been non intensive diversification in production. Oh wait, instead let’s have a huly at the stadium for botanic gardens and make, hmm, say $15,000 on a ratepayer funded rort worth about $800,000, thought up by Community and Recreation Services (CARS).
      FML.
      So angry I might go drown myself in all that unhealthy water that remains. There’s plenty of it.

  10. amanda kennedy

    Golly. What a shame all of the city’s money has been ‘invested’ by stadium councillors Hudson and mates in Farry’s folly. Don’t expect our local media to make the connnection between stadium debt and no money available for unimportant things like water. Gosh no, important stakeholders might end up looking like fiscal muppets and that must not happen. We must continue to believe they are all Masters of the Universe. Give them all an award.

  11. amanda kennedy

    And more to the point we cannot expect our local media to make the connection between the Hudson, Bezett, Acklin, and mates’ dire fiscal decisions leading to massive debt and their hopes for re-election in less than two years…

  12. Phil

    I note that Christchurch City Council have set aside $45 million to build a fully reticulated waste fuelled central heating and cooling system covering the entire CBD as part of their rebuild. Fantastic.

    What might have been.

  13. Calvin Oaten

    Whatever is the Ch Ch council doing, considering such a matter as a waste recycling heating/cooling system? Doesn’t it know that is a No No area clearly established by the DCC? What next? A fart tax from within the council chambers? Probably heat and cool the building and Riccarton Mall as well.

  14. Anonymous

    But if we budget to replace the entire infrastructure over its 70-year life, that would only be an accrual of $11.7M annually, on average. Surely infrastructure assets have quietly been accrued against as they have been installed over the years?

  15. Hype O'Thermia

    Anonymous, one of these days – well, if things get so bad that there’s no dodging a forensic audit – we are likely to find that someone tickled the slot in the piggy bank and what you hear rattling in it now are 3 washers and a couple of old 2 cent pieces.

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