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Thursday
Jun302011

Essential (Core) Services.

A paper presented by Council Strategic Policy Manager - Katherine Palmer on Wednesday is the next  shot in in the 'district' v. 'area of benefit' war. This has been going on ever since the Sharp/Barriball motion back in 2001 to adopt 'district' charging for wastewater when the cost of the new plants was considered 'unaffordable' for the communities where they were planned. No one knew at the time that they would end up costing $92m.

It was understood then that water and stormwater would quickly follow into 'district arrangements which would have benefited Thames and Coromandel ratepayers to compensate for having their wastewater charges sky-rocket to help pay for the Eastern schemes.

For one one reason or another these other 'waters' were never brought under the 'district' mantle, leading to the undoubted resentment that exists to this day, that I highlighted on many occasions during the previous Council, and that led to the walkout last year that caused so much angst. 

Now, the Council's strategic planners, under some pressure from councillors who no doubt can see the pitfalls ahead if something is not done and rapidly, and for consistency, want to bring the 'district' scheme back into focus, covering five 'tier one' essential services including wastewater, water, stormwater, district transportation (roads etc) and solid waste. 

This move has been partly prompted by the realisation that new and very expensive water schemes need to be implemented for Tairua/Pauanui and Matatoki over the next couple of years that staff consider un-affordable on a 'area of benefit' basis. Never mind that Thames for one has been paying through the nose for water and stormwater over the last ten years in addition to subsidising Eastern wastewater, and that the Matatoki proposals to date are deeply flawed. 

And never mind all the arguments that keep being put forward regarding ways in which Thames has been subsidized in the past - one councillor last year even had the temerity to bring up the old Moanataiari Sea Wall scheme where some $600g from the East was put in many years ago. As I have always argued, it is all a matter of scale. The masive $92m Eastern wastewater Scheme is hardly comparable with anything that Thames has faced over the years where it has been a case of 'heads I win, tails you lose' as far as its rate-payers are concerned.

This situation is not one that current councillors are particularly familiar with, and their natural inclination is to call my arguments a relic of the past, and get it off the table ASAP by adopting the change in strategy suggested in this paper. Though it is interesting to note that both Crs. French and Brljevich raised concerns yesterday about rushing into it. Unlike others, they both have some 'history' under their belts and are wisely suggesting caution.

The upshot was that all those round the table now want to wait until the revenue/costs review being prepared by Financial Controller Steve Baker that I have alluded to on previous occasions has been completed - probably next month.  Both the Mayor and other Eastern councillors seem confident that it will show that our arguments are groundless, and that Thames has in effect been heavily subsidized over the years.

I have confidence in Steve's ability to produce a fair document that digs deeply into every aspect of cross-subsidization that exists within the district, but I am sure he will not mind if his methodology is subjected to close examination by those who have a deeper understanding of council history and finances than I. 

Whatever the outcome, such a review is long overdue. It should have been completed years ago in order to allay the deep resentments created as a result of the 2001 Sharp/Barriball motion, and to prevent the accusations of mis-information that have plagued past councils. 

But regardless of all this background, Council accepted a late daft motion modifying Katherine Palmer's draft, and prepared by the Chief Executive that distinguished community beneficiaries and exacerbators in the following manner:

3.   Agrees in principle that it should adopt a consistent approach to viewing viewing community beneficiaries and exacerbators of essential services, as follows:

a       The community beneficiaries of essential services are identified as the District as a whole because: 

    • The Council and the District community consider the essential services to be of importance and benefit the district as a whole
    • The Council and the District community consider the outcomes achieved by the delivery of those services to be of importance and benefit the District as a whole
    • The benefits of essential services would be received on an equitable basis across the district (over time) despite differences in the cost of delivery (note that this does not mean the same level of service to all properties)
    • The Council has a role in sustaining urban communities to provide benefits to both urban and rural ratepayers.

b    The commmunity exacerbators of essential services are identified as the District as a whole because: 

    • The need for the activity to be delivered is likely to be the same across the District
    • Local exacerbatorsof of the activity are often outside of the community's control
    • People choosing to reside in an area creates the need for an activity however this should be done in accordance with the District land use policies (set with district benefits in mind).

4.   Instructs staff to adopt this approach when drafting the revised draft 2012-2022 Ten-Year Plan: Revenue and Financing Policy.

5.   Asks the Chief executive to develop a financial model that details the implications of applying the essential services principle and report back to Council at its August 20111 meeting.

6.   Asks that the Financial models look at the funding allocations for all Council services in addition to essential services.

This motion (adopted) has massive implications in a number of areas, and may result in a huge change in the direction that our Council takes in the future. There will surely be winners and losers out of this policy change that will need to be closely examined through the Ten-Year Plan consultative process, but until the modelling has been completed, there is little to comment on.

For instance, does the proposal to distinguish beneficiaries and exacerbators mean a move to standardised charging for all essential services, and for instance, contributions by rural ratepayers for services that they currently do not receive directly? If this is the case, there will one hell of a backlash, already demonstrated last year when we tried to extract a small charge for wastewater from rural dwellers on the rationale that they still benefited from the urban service.

The final outcome of this modelling in August will be awaited with great interest.

 

 

 

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Reader Comments (2)

It seems that elected members want to look efficient by making everything be charged to all properties and lower the rates in urban areas while loading the lifestyle blocks in rural areas with urban costs. Many DIYers took on unserviced properties because they thought that user pays would protect them from costs of facilities they would never use. Looks like this Council is using a one-size -fits -all despite its inherent unfairness. This was clear from the CEOs report that preceded the one-district wastewater policy. At this stage all properties not attached to a Council sewerage scheme are paying a substantial part of the $260 interest on loans in their rates which goes directly to the Australian banks as profit. If I read Bill's Blog correctly the Council owned water supplies will be a charge against all properties also and is probably a precursor to privatisation. Goes to show what inexperienced members will allow to avoid complexity.

June 30, 2011 | Unregistered CommenterPeter H Wood.

Sorry Pete, I must correct that water assumption - there was no suggestion that the water charge be 'district' other than in terms of connections, as with wastewater. I will go back in and see where I can remove that doubt.

Later on Thursday - Actually, on re-reading Steve's draft, I see what you mean - there are some real fish-hooks in there. The problem is that a lot of this stuff emerges from workshops where we have no idea how it has been developed, and it is just presented on the day as a fait accompli. They may be buying themselves a real fight on this one.

June 30, 2011 | Registered CommenterBill Barclay

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