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Banks and C&R Endorse Metrowater Price Gouging

Media Release
City Vision-Labour Councillors - Auckland City Council
For Immediate Release
Wednesday 24 September 2008

Banks and C&R Endorse Continued Metrowater Price Gouging

City Vision-Labour Councillors were shocked to discover at today's Finance and Strategy committee meeting that Auckland City water users are now generating such a profit for Metrowater that for the first time Metrowater has had to pay tax with a whopping bill of at least $6 million to be paid into Government coffers. In a surprising move, Citizens and Ratepayers (C&R) Councillors have refused to even acknowledge this as fact.

Councillor Richard Northey said, "I am appalled at the gouging of Auckland City water users who are now not only paying over $22 million in charitable payments to Auckland City Council this year but are also providing $6 to $10 million in company tax to fund Government expenditure which will benefit New Zealanders from Cape Reinga to Bluff."

Councillor Cathy Casey said, "People are fed up with being over charged for their water and waste water services. It is blatantly dishonest to subsidise rates by pushing up prices. People are really struggling and Metrowater should be providing essential water services at the lowest possible price."

Councillor Leila Boyle said, "C&R have repeatedly voted to increase both charitable payments and water prices so they have another source of income other than rates. These policies are hurting our poorest families by raising fixed charges higher than they need to be. C&R are unfairly continuing to use Metrowater as a 'cash cow' to fund Council projects which are completely unrelated to Aucklanders' water and waste water usage."

ENDS


Additional Information:

Today's Finance and Strategy Committee agenda paper can be found here:
http://www.aucklandcity.govt.nz/council/members/committeemeetings/finance/20080924_0930/FIN%2D24092008%2DOPN%2DAGD%2D%2305.pdf

Metrowater's fourth quarter report for the quarter year ended 30 June 2008 can be found here:
http://www.aucklandcity.govt.nz/council/members/committeemeetings/finance/20080924_0930/FIN%2D24092008%2DOPN%2DAGD%2D%2305a.pdf

The officers' recommendations and City-Vision Labour amendments were as follows:

5. REVIEW OF METROWATER'S PERFORMANCE FOR THE FOURTH QUARTER – 2007/2008
A. That the Finance and Strategy Committee receive Metrowater's report for the fourth quarter up to June 2008, noting that:
i) the NPBT for the year was $29.1 million, $1.1 million ahead of budget;
ii) capital expenditure was $54 million, just $1.5 million under budget;
iii) unaccounted for water is now 15% (based on a 12 month rolling average), well within the statement of intent (SOI) target of 16.4%;
iv) Metrowater has met the full year targets in relation to 19 of its 23 key performance indicators set out in the 2007/08 statement of intent. Targets not met are capital expenditure, number of properties separated, enquiries and calls responded to within ten working days, and 'one call resolution'.
v) all financial statements should be interpreted with caution as the accounts are unaudited and are based on assumptions that could change.
B. That the Chair and Chief executive of Metrowater be thanked for their attendance.
CARRIED

Councillor Northey to move the following amendment by way of addition:
vi) Metrowater charges have been set at a sufficiently high level to generate a Net Profit Before Tax of $29.1 million that required an unprecedented at least $6 million of tax to be paid in 2007-08.
vii) a record charitable payment, equivalent to a dividend, of up to $23.1 million will be made available to be paid to the Auckland City Council to supplement rates income so that the rates rise can be held down to 5.0% for the 2009-2010 financial year.
LOST
(2 votes in favour – Casey and Northey
4 votes against – Armstrong, Banks, Bhatnagar, Goldsmith)

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