New Legislation Could See Marlburians Pay More For Water

Sunday, 9 March 2025, 9:20 pm
Article: Maia Hart - Local Democracy Reporter

The Marlborough District Council will not be able to use dividends from Port Marlborough to fund its water infrastructure in the future.

New legislation to reform the country’s water infrastructure, Local Water Done Well, does not allow the council to use income streams from the likes of the port and river land rent to pay off three waters debt, like it does now.

It instead requires the council’s water services to be “ring-fenced” and financially separate from council’s other functions, the council’s chief financial officer Geoff Blake said at a full council meeting on Thursday.

It meant ratepayers, in theory, could have to pay more for the delivery of drinking water, wastewater and stormwater.

But Blake was confident the council would offset costs within other areas of the council to balance that out.

“Exactly what that looks like, I don't yet know. We need to work through the details in relation to that,” he said.

Port Marlborough gave a distribution of $4.5m to its sole shareholder, Marlborough District Council Holdings Ltd, in the past financial year.

The average rates for water in Marlborough was projected to increase by $1977 per connection, from $1985 in 2024 to about $3835 by 2034, or about 5% per year.

The new legislation, which replaced the former Government’s Three Waters, was passed in September last year and required the council to develop a water services delivery plan.

Since then, the council had started to investigate its options.

Blake said the Government had originally provided councils with five water service delivery options: 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.

Trust-type models were ruled out by the council on Thursday. Blake said their borrowing capability was “far less favourable”.

In October last year, the council did agree to investigate its options with the neighbouring Tasman and Buller councils. Nelson was not part of the conversation, as they had publicly decided to “go out on their own”.

An update on this option was still to come on April 3. Blake instead presented an update on the option to keep Marlborough’s water delivery as a standalone entity.

A draft viability and sustainability assessment, done externally by Beca Consultants and MartinJenkins, was included in a report for the meeting.

Blake said the debt trajectory of the in-house water utility was sustainable for the next nine years. The council was forecasting deficits across its three water services over the next 10 years but aimed to achieve a surplus from 2034.

“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.”

The council had invested $121.25m in three waters assets over the past six years. It planned to invest $404.2m in three waters assets over the next 10 years a 57% increase in annual investment.

Borrowing for water services was expected to more than double, peaking at about $208m in 2030-31, a report to the committee said.

Marlborough mayor Nadine Taylor asked if the council had an understanding as to what threshold the region’s water would become unaffordable.

Mike Chatterley, an associate at MartinJenkins, said he and his colleagues were working across 16 councils at the moment.

“Where you [Marlborough] sit on that affordability benchmark for your Three Waters is better than most,” he said.

“Affordability can become a bit of a fraught question and does come down to, you know, decisions by the council as well around what affordability means for your community.

“I guess that's a long way of saying there's not a definitive answer at this point, unfortunately. But looking at those numbers, I think you're on the healthy side.”

Consultation on the water services delivery plan was proposed to take place from April 4 to 27.

The legislation allowed the council to consult differently than it usually did, which Blake said was “perhaps not as arduous”.

LDR is local body journalism co-funded by RNZ and NZ On Air.

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