Comment On Metrowater Price Increase.

The proposal by Metrowater Ltd to increase water charges by 9.1% may be illegal and I have asked the Auditor-General to clarify the position.

Other commentators have rightly expressed the opinion that this increase is a devious method of extracting more money from ratepayers by way of, supposedly ‘user pays’, water rates – thus allowing the council to adopt the stance that it is keeping council rates to about the rate of inflation.

However, according to the Statement of Intent on the company’s website, it appears that it was never intended that Metrowater should pay dividends to the Council.

Indeed according to Metrowater’s constitution it is not allowed to pay a dividend to its shareholder, Auckland City Council.

The constitution also states that any profits made should be re-invested in the business, and any profits that are not so re-invested must be returned to the Council as a ‘Charitable Donation’, and that the money donated is to be used for charitable purposes anywhere in New Zealand.

However, in its 10-year plan, the Council states that this Charitable Donation is to be spent on Stormwater capital projects.

Metrowater has no responsibility for funding stormwater projects.

Stormwater capital projects are normally funded by the Council, largely through rates.

Does this mean Auckland City Council considers Stormwater management to be a charity?

If Stormwater projects are to be classified as ‘charitable’ one wonders what sort of ‘charity’ the council has become – and who are the ‘needy’ who will benefit from these charitable donations?

I am pursuing inquiries through Metrowater and the Auditor-General to have the position clarified.

ends

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