What the government’s Local Water Done Well legislation means for local ratepayers is on Hamilton City Council’s agenda this week.

The impact on rates is just one element of what Council needs to grapple with in response to the raft of water-related legislation being rolled out by the coalition government.

A key requirement of the Government's Local Water Done Well Policy is that councils will need to ring-fence all costs and revenue related to drinking water, wastewater and stormwater activities.

Residential properties in Hamilton currently pay for all three water services through a variety of charges that are applied to all households. Commercial properties pay for water services by a metered charge or a fixed amount.

Of these, only the metered charge would meet the ring-fencing requirements set out by central government, so Council needs to rethink how it charges for the daily delivery of 65 million litres of drinking water, treatment of 60 million litres of wastewater, and maintenance of the city’s 700km stormwater network.

In September, Council agreed to separate these water costs on ratepayers’ invoices, through three new targeted rates from 2025/26. Some other targeted rates would be discontinued at the same time.

The report for Council’s 31 October meeting presents the options for how the three targeted rates could be calculated, with a capital value system recommended by staff and preferred by the Waters and Rates Working Group (a subset of Elected Members).

Targeted rates by capital value represents the closest alignment with the current system, and would have the fewest number of ratepayers receiving an increase to their rates in 2025/26 (beyond the 15.5% average increase set out through the 2024-34 Long-Term Plan).

The alternative options are to charge a fixed rate by either rating unit or SUIP (separately used or inhabited part of a rating unit), both of which result in the majority of ratepayers being worse off with their total rates bill.

“Hamiltonians have always paid for water services in their rates,” said Mayor Paula Southgate. “Government’s Local Water Done Well requirements will mean that ratepayers will be billed in a different way. We are focused on absolute transparency about this and minimising the impact of any changes.

“As Mayor, I want Hamilton to be the absolute best in water management. That means the best water quality, the best service, the best value, and the best public engagement —now and into the future. In doing so, we must work in the best interests of our ratepayers and ensure we continue to meet our regulatory requirements.”

While Council is aiming to achieve as close to a year-on-year like-for-like outcome as possible, Hamilton’s property values are scheduled to be updated for rating purposes from 1 July 2025, meaning ratepayers may also experience a change to their rates as a result of that process.

The revaluation does not change the total rates collected across the city but changes the distribution of rates between properties depending on how values change from the current 2021 valuation.

Changes to the rating structure (and other matters) mean Council has to go through a long-term plan amendment process.

Note:

The various charges paid by residential properties that currently fund water services are the general rate, government compliance rate, and uniform annual general charge.

The government compliance targeted rate was introduced in 2021/22 to fund increasing costs as a result of legislation introduced by central government, in relation to water services and changes to the District Plan.

A targeted rate can be set to fund one or more services provided by a council.

The rates that would be discontinued at the same time as the introduction of new targeted rates are the government compliance targeted rate, service use water rate, and service use wastewater rate.

The Uniform Annual General Charge (UAGC) is a fixed portion of rates, applied in the same way for all ratepayers, and not based on a property’s value. The UAGC is applied per separately used or inhabited part (SUIP).

Every property is treated as at least one separately used or inhabited part (SUIP). Additional SUIPs are applied for any part or parts that is used or occupied by the ratepayer for more than one single use.

© Scoop Media