Revised Waimea Community Dam funding model reduces increased cost to ratepayers

The Waimea Community Dam project will continue, thanks to a revised funding proposal that reduces the cost and risk to ratepayers of proceeding.

The Tasman District Council has voted 9-5 to revoke an in-principle decision it made on 28 August not to continue with the dam.

Tasman Mayor Richard Kempthorne said the decision was overturned after new information was presented to councillors that showed the cost to ratepayers of a $23 million increase in the overall project price would be minimised. The information also showed the risk of the Council’s credit support for a loan to irrigators through the Council-Controlled Organisation had significantly reduced.

“We’ve still got a lot of work to do to reach financial close and the final decision point for the dam,” Richard said. “However, today’s decision means we keep the ability to draw on $73 million in external funding for a project that will give us 100-year water security and protect the health of our precious water resource.”

After the 28 August decision, the Council’s dam joint venture partners, Waimea Irrigators Limited (WIL) working with investors and central Government, proposed a revised funding model that limits the impact of the price increase on ratepayers.

The revised funding model means:

· The District-wide fixed rate remains unchanged at an estimated peak of $29 a year

· The Zone of Benefit rate based on capital value remains unchanged

· A small increase in water charges for urban water users on top of the increase consulted on in 2017 - equating to about 50 cents a week for the typical residential user

The Council’s decision not to proceed with the project on 28 August came after the price of the dam increased by about $23 million. Under the existing funding model, the Council faced an increase in its contribution to the project of $11.5 million – taking its total share of the costs to $38.3 million.

Richard said the revised funding model meant irrigators would be effectively contributing 75% of the servicing costs for the $23 million price increase.

“That significantly limits the effects of the increased price on ratepayers, which was the Council’s key concern on 28 August. There were also concerns about the level of risk the Council was carrying, and that is significantly reduced as well because of the introduction of a reputable New Zealand institutional investor into WIL.”

ENDS

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