Council Progresses Local Water Done Well Proposals
Councillors were updated today on progress towards achieving the Government’s water reform programme, Local Water Done Well.
The reforms aim to address New Zealand’s water infrastructure challenges and place emphasis on financial sustainability, appropriate regulation of water services and ensuring flexibility for communities and councils in determining how their services - water supply, wastewater and stormwater - are delivered.
The report presented at Thursday’s full Council meeting summarised the analysis of a potential Marlborough standalone water utility. Analysis of a multi-council option - with Tasman and Buller district councils - will be presented to Council on 3 April.
Chief Financial Officer Geoff Blake said consultants Beca and Martin Jenkins had provided extensive analysis of the Council’s current projected water services’ financial information, based on its 2024-34 Long Term Plan.
“Currently debt repayments for our water infrastructure investment are supported by income received each year from Port Marlborough and river land rental income. However using this type of income does not meet the Government’s new ‘ringfencing’ rules, whereby our new water utility must be financially separate from Council’s other functions and activities.”
Mr Blake said the Government had originally provided councils with five water service delivery options, including a modified status quo (in-house council department), a single council controlled organisation (CCO), a joint CCO with other councils, and two types of trusts.
Advertisement - scroll to continue reading“Work is continuing to identify and understand the benefits of a multi-council CCO as well as a standalone Marlborough CCO for the decision-making process on a preferred option to take to public consultation in April,” he said.
Trust type models had been ruled out because their borrowing capability was far less favourable than that of councils who have access to lower interest rates via the Local Government Funding Agency.
“In terms of financial sufficiency, the in-house water utility’s debt trajectory is sustainable over the next nine years,” Mr Blake said.
“While we are forecasting deficits across our three waters services over the next ten years, we are aiming to achieve a surplus from 2034 onwards.”
“Water bills would be expected to rise by about 5% a year to 2034, reflecting the $400 million investment in our water infrastructure to 2034. This is a 57% increase in investment compared to the last six years.”
“On the other side of the coin, other council activities could in future be financially supported by the Port Marlborough and river land rental income, lowering rates on the non-water side of Council’s ledger,” he said.
Further information, including a Viability and Sustainability Assessment by consultants Beca and Martin Jenkins, is available at www.marlborough.govt.nz/services/utilities/local-water-done-well
Notes: (from the Viability and Sustainability Assessment report)
Marlborough District Council provides 16,789 properties with drinking water; 14,229 have a wastewater connection and 9,591 have a stormwater connection.
Drinking water
Council operates seven drinking water supply schemes, in Blenheim, Picton, Havelock, Renwick, Riverlands, Wairau Valley and Awatere/Seddon. Total length of reticulation is 572 km.
Most water assets assessed are in moderate to very good condition, with a small proportion in poor condition. A significant proportion of assets are approaching the end of life, approximately $45 million in years one to nine (to 2034), and $35 million in later years 10-19.
Wastewater
Council operates four wastewater schemes in Blenheim, Picton, Havelock and Seddon. The reticulation networks at Blenheim, Renwick, Grovetown, Spring Creek, Riverlands, Cloudy Bay, Marlborough Ridge and Woodbourne drain into the Blenheim sewerage treatment plant at Hardings Road. Total length of reticulation is 332 km.
The majority of Council’s wastewater assets are in good or very good condition. About $20 million of pipeline assets are approaching the end of life in both years one to nine (to 2034), and years 10-19. The wastewater treatment plants across the district are generally in very good condition, with regular inspections and high-standard maintenance.
Stormwater
The urban stormwater systems consist of components such as swales, channels, and ponding areas as well as constructed assets including inlet sumps, stormwater mains, manholes, pump stations, retention areas, secondary flow paths and soak holes. It covers Blenheim, Picton/Waikawa, Renwick, Okiwi Bay, Riverlands, Spring Creek, Seddon /Grovetown/ Anakiwa and Havelock. Total length of reticulation is 203 km.
A significant proportion of Blenheim and Picton’s stormwater assets have an expected life of less than 10 years. However, the condition assessment of a number of these assets suggest that they are still in moderate, good or very good condition. Therefore, considering their extended lifespan, a significant proportion of various assets in the entire network will require replacing between 2035 to 2065.