New emergency insurance will safeguard ratepayers
New emergency insurance will safeguard river scheme ratepayers
For immediate release: Monday 9 May 2006
Bay of Plenty residents will be better protected soon from the financial hardships caused by catastrophic natural disasters damaging vital flood protection works.
Environment Bay of Plenty plans to join a local government scheme that insures stopbanks, canals and rockwork damaged during civil defence emergencies like the floods of July 2004.
The insurance will top up the Government’s Disaster Relief Fund contribution of 60%, covering the remaining 40% repair costs. At the moment, ratepayers of the Bay of Plenty’s five river and drainage schemes pay into different emergency reserves funds, which are supplemented by loans if necessary.
Operational services committee chairman Jim Pringle says the new type of insurance will help safeguard ratepayers, especially farmers living on the hard-hit Rangitaiki Plains. “Major floods seem to be coming thick and fast these days,” he says. “Some reserve funds are already severely depleted because of the events of the past few years. We think this will provide a better level of financial surety.”
The Local Authority Protection Programme Mutual Fund (LAPP) provides cover for 40% of the replacement costs of river and drainage scheme infrastructure damaged as a result of catastrophic natural disasters. It will cost $125,000 a year for the cover for all five schemes, with a joining fee of four times that amount, or $500,000.
Last year, Environment Bay of Plenty staff consulted with river and drainage scheme liaison groups on the insurance option. “There was general agreement that we should go ahead if we thought it was in the best interests of the schemes,” explains the council’s group manager of operational services, Clive Tozer.
He points out that the insurance does not cover structures, such as pumping stations, floodgates and major culverts. These are insured under a conventional insurance policy.
The operational services committee recommended that Environment Bay of Plenty join the LAPP Mutual Fund at its meeting on Thursday 4 May.