Council Party Moves to Lower Water Charges

A group of Auckland City Councillors has given notice that it intends to oppose the collection of a $24 million charitable payment from the council owned entity Metrowater that has, in turn, notified customers that their water charges will increase 9.1% in the coming year.

The Auckland C&R Team has initiated a move for the payment to be reduced to $18 million, which is the amount Council currently receives from Metrowater. They have also called for a comprehensive review of the major financial issues facing Metrowater. This must be conducted in time for the Annual Plan Direction Setting (APDS) meeting, which will be held in November.

Councillor Douglas Armstrong, Finance spokesman for C&R, said “This initiative to maintain the status quo gives Council and Councillors some time to investigate some crucial strategic issues around Metrowater. Metrowater is functioning incredibly well as a Council Controlled Organisation (CCO) and the essential governance structure is sound. However, we want a review by an independent professional that will cover things like whether the City should receive some return on its’ capital invested in Metrowater, the effect of increases in Watercare’s wholesale water charges, taxation issues, the appropriateness of Metrowater also looking after aspects of storm water infrastructure and the effect of conservation measures on pricing that reduce the amount of water sold.”

Whilst the motion will not have any effect on the City’s current annual income budget, it will reduce the income for the 20008/9 year, reducing it by $6 million. C&R have indicated that this reduction should be addressed by making savings in current operational expenditure, rate increases, borrowing and deferred capital works in equal proportions and after applying any surplus in the current year.

“We still have some hurdles to cross before this goes through,” said Councillor Armstrong. “The reduction does not currently have the support of the City Vision/Labour left controlling faction of Council and Audit New Zealand is also looking closely at the quantum of reduction given that we have consulted on the higher figure, but we are convinced this is the most appropriate course of action. It should enable Metrowater to restrict price increases to around the 5% level for the current year. Future price increases will depend on the election results and decisions taken in light of the findings of the review. Any report resulting from the review will be made public”

The issue will be debated tomorrow at a specially convened meeting of the Finance and Corporate Business Committee.

ENDS

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