With three waters repealed, Far North District Council is facing some unaffordable rates increases to meet mandatory water demands and it says greater lending isn’t going to be its way out.
While Auckland’s water provider (which would have merged with Northland water entities) has found a way forward with a deal signed on Sunday, Far North Mayor Moko Tepania said 6200 of the region’s 30,000 ratepayers had been unable to pay rates.
The council was already tightening its belt to manage a 14 percent rate hike before the coalition Government repealed the three waters reform.
A 16.5 percent rates increase will go towards replacing or upgrading the network of 16 waste treatment plants and eight water plants, many built by the Ministry of Works 70 years ago.
Planned rate rises over the next three years will work out to around 30 percent.
Only two of the wastewater plants are compliant; the remainder have been issued abatement notices, including some that discharge treated sewage into the Hokianga Harbour.
Some of its drinking water plants have also been issued abatement notices, and estimates for mandatory work on the region’s water network totalled $660 million last year.
Tepania said the Auckland deal announced by Minister for Local Government Simeon Brown and Auckland Mayor Wayne Brown on Sunday didn’t have anything close to a solution for his region.
The pair’s Watercare deal will allow Auckland residents to avoid 25.8 percent water price increases. Watercare will still be owned by Auckland Council, but will be removed from its balance sheet, with the council banned from providing it any financial support.
This will allow the water entity to borrow far more than if it were on the council’s books.
Rating agency S&P’s analyst Anthony Walker said this will result in more expensive borrowing costs, “An entity such as Watercare can’t borrow on terms as competitive as the council can unless it’s part of the council or at least backstopped by the council.”
The Government will provide further details in June or July on the broader range of structural and financing tools that will be available to other councils to ensure they can access the finance required for water services infrastructure.
Tepania said the region’s water problem was a socio-economic one and that the Far North District Council had debt headroom available, but the locals couldn’t afford it.
“You can tutu through legislation to find us ways to be able to borrow money better, but at the end of the day, our people on the ground have got huge affordability issues, because of the socio-economic profile of our people here in the Far North.”
Under the previous government’s plans, the Far North would have been wrapped into a much larger entity with other local governments – including Auckland – to leverage scale in securing funding and getting work done.
“No one is ever going to join with us voluntarily unless there are external funding streams or an external mandate to do so. Otherwise, why would you do that to your own people?”
That $660m figure only caught it up with First World three waters standards “rather than the Third World we’ve currently got”, and didn’t cover any growth in the region, he said.
“The solutions that are being offered are solutions that we can use, but they’re still not solutions for the end game, which is people who can not afford the level of investment required.”
Tepania said the Far North District Council wasn’t being invited to be part of the conversation around the solutions it required under Local Water Done Well.
Like other councils, the Far North has been asked to redirect previously committed Government funding into water infrastructure.
“What National are proposing is ring-fencing the level of investment required from council so that it can’t use it for nice-to-haves and have to use it for must-haves, but we could commit 100 percent of our operating budget and max out the credit card and it’s still not going to be enough to catch up.”
He said he was working the Department of Internal Affairs to highlight some of the challenges it was facing, but that the council was taking it as it comes – whether it had to go it alone or with direct government support.
He also questioned why Central Government was prepared to give 71 percent funding assistance for local roading “but when it comes to water infrastructure, we’re left high and dry.”
“I’m not seeing anything that is going to help the people of the Far North. Whether it’s on the council’s books or whether it’s on a CCOs books, the people of the Far North themselves still can’t afford the level of investment required to bring our schemes up to a safe standard.”
Can the writer of this article please clarify the comment about 6,200 missing the first payment for rates increase to cover water costs.
The last quarterly payment for rates for the 2023-2024 year is due on 20 May. That rate was set in June-July 2023.
The level of rates for 2024-2025 has not been finalised.
So what is this first payment for rate increases related to?
its the same old stuff, the elephant in the room is that the govt wont tax the rich and nobody mentions the fact. govts taxing the rich and corporations is not in the narrative anymore . you mention that the existing infrastructure was put in place seventy years ago by the ministry of works ,those were the days when the top tax rate was 66 cents in the dollar compared to the 38 cents now, we all talk about borrowing in great detail but never talk about how we did things in the good old days, the ”golden period ”when we could all afford a house and education and health were free. its not rocket science its just that the rich control the narrative and they don’t like tax.
The so called poor of the Far North who are of some Maori decent in many cases, refuse to pay rates, regional rates, vehicle rego, vehicle wof, vehicle insurance, building consents.
Yet this ignorant Mayor continues to thump the genuine law abiding citizens of average wealth (what ever that is) instead of making a stand against the real controllers of the narrative.
How about some facts to justify your bigoted comments?
Facts like what is the rate of non-payment of rates in the Far North compared to other districts across the country.
Facts like household income distribution in the Far North compared to other districts across the country.
And the far north voted to repeal 3 waters so the citizens have got what the majority voted for
Sometimes there is a sacrifice to remove destructive socialist policy
So the key element here is that those of us who live in the FNDC area cannot afford to pay for water infrastructure maintenance and compliance. The previous Labour government wanted FNDC, Kaipara DC and Whangarei to be folded into Water Entity 1 (effectively Watercare+) but Water Entity 1 had no specific plans to do anything about water assets in the FNDC area. Clearly it would have needed to subsidise any such initiatives from funding sources outside the FNDC area, so there is no guarantee that this would ever have actually happened.
If the FNDC (and other councils in a similar position) want someone else other than ratepayers to pay for this then they need to recognise that the source of those funds would logically want some equity in the new or improved services.
There is no mention of water being taken over by the Regional Council.
Let us give the new Government time to get together with Northland local bodies in respect of how ‘local water done well’ can be made to work for them.
Some of the comments above don’t arch with what I understood to be the case.
What I do know is that huge numbers of Aucklanders holiday in the far north and I simply do not support swanning in and out without paying your fair share of the utilities you rely upon.
The problem with the Far North is over the past 30 years those elected have refused to adopt a plan to manage our growth.
I was on the Community Board in 2007 & was actively involved in developing a Structure Plan for Kerikeri/Waipapa, the fastest growing town in Northland. Still is. The plan was finally adopted by Yvonne Sharp’s council, but when Wayne Brown was elected, as were other developers, it never got off the ground. His Council also wiped development contributions & that has been the status quo since.
When our sewage system was upgraded to accommodate 300 new connections, Arvida came into town & said, “we’ll have these”, meaning the upgrade was fully allocated.
This mayor has inherited a mess, created by former Mayor Brown & our former Nat MP & Mayor John Carter, who wasted millions on vanity projects.
We’ve had a succession of poor mayors who have blatantly refused to plan for our growth & we ratepayers, not the developers, are going to pay heavily for that.