Embargoed against release till 9am March 8, 2011.

Water meters under consideration

Council is to include water meters in the draft Annual Plan for 2011/12 in a move designed to give more certainty that water consumption and leak reduction targets will be met.

Council has a significant Water Supply Project underway that has two separate but related streams.

“One is to provide a long-term secure water supply to Waikanae, Paraparaumu and Raumati residents. The other involves a number of conservation and educational initiatives aimed at reducing peak consumption to 400 litres per person a day,” said Mayor Jenny Rowan.

“The level of capital investment involved in the first stream is based on the assumption that we can reduce peak consumption to 400 litres per person a day. Peak consumption, however, is running at up to 560 litres a day and in some areas, more than 700 litres.”

Council had a number of innovative schemes underway aimed at reducing consumption. One was Plan Change 75 that required all new dwellings to have rain water tanks or diversion systems. It is about to introduce an interest-free loan scheme to fund rain water tanks for existing homes.

“However, during preparation of the Draft Annual Plan, it has become clear there are considerable advantages in extending the coverage of water meters district-wide.

“At present staff estimate 5,200 tonnes of water a day is being lost from the network. That is a phenomenal figure. Leak detection suggests the biggest loss is on private property. One leak found recently totalled 30,000 litres a day.
“The installation of water meters will provide detailed information about what is being consumed and where, and what is being lost.

“There are clear fairness reasons as well to support universal water meters. At present low water users are subsidising large water users. Many of these low water users are elderly on fixed incomes.

“The current annual fixed charge masks the true cost of water to individual households. Under a metered system, the cost will be transparent.
“At present, householders have no control over their bills and no ability to reduce them. Meters will also give Council more certainty about outcomes.”
Corporate Business Committee chairman Councillor Ross Church said there were two major concerns with water meters – privatisation and cost.

“Under the Local Government Act, Council cannot sell its water assets to a private company, but it can transfer the management, delivery and operations of its water assets to another local government entity, it can contract out all or part of a water service operation for up to 35 years, or it can set up a public/private joint arrangement while still retaining control over pricing and policy.

“Councillors, like many Kapiti residents, are very sensitive about this issue. Given this, we will be considering a change to our Standing Orders to require a 75% vote before any changes to the operations, management and not-for-profit nature of our water supply systems are possible in the future. We want to lift the bar as high as possible to protect our water interests.”

The cost of water to individual households was another major issue.
“We are mindful there are considerable issues around charging under water meters – how the pricing regime will impact on the elderly, families, people with large gardens. Given this, we are keen to set up a separate Charging Regime Advisory Group to look into different charging regimes. The former head of the State Services Commission and current head of the Water Supply Technical Advisory Group Don Hunn has already agreed to chair such a body, which is fantastic.”
Councillor Church said there would be plenty of opportunities for residents to debate the issue of water meters.
“The decision to introduce water meters triggers our Policy of Significance. This means there will be specific consultation on this one particular policy change. We see this running parallel and at the same time as consultation on the Draft Annual Plan.”
Councillor Church said the installation of district-wide meters was expected to result in a 25% reduction in peak residential water usage.
This would enable Council to defer some parts of the Water Supply Project. The $10 million saved would fund the cost of installing meters, estimated at $8 million.

Frequently asked questions with answers follow.

The following are a number of questions that may arise during the public debate.

1. This is a step towards privatization.
Absolutely not. The Local Government Act says a local authority cannot sell its water assets to a private company. It can transfer the management, delivery and operations of its water assets to another local government entity.

It can contract out all or part of water service operations for up to 35 years but must retain control over the pricing of the water and the development of policy relating to water services. It can also set up a public/private joint arrangement to manage and operate water services, but it must retain control over the pricing of water services and the development of policy relating to water services.

To ensure direct on-going control of management and operations and a not-for-profit approach, Council can amend its Standing Orders to make clear that a 75% majority would be required. A future policy change would also spark Council’s Significance Policy requiring specific public consultation; it would need to review its Finance Policy and its Level of Service statement. A policy change would also have to take into account recommendations made by the Charging Regime Advisory Group.

2. A move to universal water meters will penalize the elderly who largely depend on a fixed income.
Many elderly are paying more now under the annual fixed charge than they should for water. The elderly are generally low water consumers. Under the current system they subsidise large water consumers.

3. Water meters will penalize larger families.
It is possible large families could pay a little more for water. It depends on how much water they use and the water pricing regime we settle on. This is no different to the situation all families face in regard to phone and electricity bills. If they are careful with the use of water on gardens, the risks of large bills will be minimal.

There are 20,519 households in the district. Of these, 6,031 are single households; a further 6,788 are two person households.

4. Water meters will penalize those with large gardens.
It doesn’t make sense using treated water (that is delivered to your door at considerable cost) to water gardens. Advice on water saving systems is offered free by Council’s Green Plumber and Green Gardener.

5. What about large leaks found on private property? Won’t meters mean these property owners will suddenly face substantial bills?
Home owners already have a responsibility to maintain their own pipe work. Meters will help identify whether there is a leak on a property so remedial action can be taken to avoid substantial bills. Council recently found a 30,000 litre-a-day leak on a private property. Water meters will help pin-point such leaks.

Many other Councils have a policy that if a high water meter bill is caused by a leak in the system the owner didn’t know about, then a credit will be issued once the leak is promptly repaired. It is highly likely that our Council will adopt a similar policy for residences.

6. What impact will the introduction of district-wide meters have on the existing water supply project? Will this result in Council pulling out of the project?
We still need to improve water quality and increase our supply capacity. Work on the new scheme will continue, but water meters and associated conservation moves, will mean we can better stage capital investment over a longer period of time.

7. What impact will this have on my rates?
No direct impact beyond that shown in the LTCCP because some planned capital investment in the Water Supply Project will be pushed back. The reduction in peak water usage will produce capital and operational savings. Examples include:
• the proposed reservoir for Otaki will be built smaller. It will be 40 to 50 years before a second reservoir is required;
• much of the equipment in the Waikanae Treatment Plant is nearing the end of its life. At present Council is budgeting for a major upgrade and refurbishment. Lower peak demand means less capacity will be required, which means less capital cost;
• lower peak demand reduces the operating costs of pumps and the Treatment Plant
8. I thought Council had made a decision on a new water supply at a cost of $23 million. Why do we then need water meters?
The Water Supply Project has two separate but related streams.

The first is to improve the water supply to Waikanae, Paraparaumu and Raumati residents by using groundwater from an expanded Waimea borefield to supplement the Waikanae River during times of drought. This will address two serious issues with the Waikanae/Paraparaumu/Raumati water supply system – capacity and variable quality.

The second stream involves a number of conservation and educational initiatives. They include:

• Plan Change 75. This requires all new dwellings to have a 10,000 litre rain water tank or a 4,000 litre rain water tank, and a grey water diversion system;
• a new interest-free loan scheme to encourage existing home owners to install water tanks will be launched at the March 26/27 Sustainable Home and Garden Show. Under this scheme, home owners will be required to pay back just the principle over a 10 year period through their rates;
• on-going educational programmes, including the award winning school essay competition, free Green Plumber and Green Gardener advice, and free leak detection work.
Council has a target of reducing peak water consumption to 400 litres per person per day. At present peak consumption ranges between 540 and 560 litres per person per day across the District, but some areas are as high as 760.

Our capital investment in water infrastructure is based on getting our peak consumption down to 400 litres per person per day. There is no certainty that the above measures will enable us to reach this target. Water meters will provide that certainty.

9. When will you start charging under water meters?
If Council votes to support this policy for Draft Annual Plan consideration, then a special consultative process will be required. Once submissions have been received and submitters heard, then Council will have to make a final decision. This will be near the end of the Draft Annual Plan process around June. Water meters could be installed from July 1, 2012 and be in place by September 2013.

At this stage we intend to read the meters around January 2014 and again in July 2014. A sample invoice for that six month period would then be sent out so people can see how much water they are using, what it would cost, and have the chance to make changes to their water use habits. They will not have to pay this invoice.

The formal charging regime would start from July 1, 2014.

10. Most of my water comes from a private bore. Will I have to pay for a water meter as well?
The cost of installing the water meters will be paid by Council and then recovered through water by meter charges.

We expect to set up Charging Regime Advisory Group to provide advice on a pricing regime. Whatever the outcome is, it is likely to include a fixed line charge up to a certain level. This is based on the same principle as a line charge for electricity.

11. If I find a large leak on my property, will Council fix the leak for me free?
No. Property owners are responsible for their own pipe work. The cost of water supply would go up dramatically if Council accepted this responsibility across the district. Advice on solutions can be sought from Council, however.

12. You should not charge for water. It is free

The water is “free” but there are considerable costs associated with its capture, storage, treatment, and delivery to each household, and in addition, on-going leak detection.

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