One of the biggest local government decisions this century will go before Wairarapa councillors on Wednesday.

Water reform meeting agendas for Masterton, Carterton, South Wairarapa, and Tararua councils have been published, revealing the average three waters connection cost for users by 2034, updated to account for inflation.

Each council would be required to submit a water services delivery plan to the Department of Internal Affairs by September 3, the drafts of which were included in meeting agendas.

Under a joint Wairarapa-Tararua water services entity, South Wairarapa users would be hit hardest, with average annual water bills expected to be $6605 by 2034.

Tararua’s average charge would be $4956, and Carterton’s would be $4170.

These figures were higher than the uninflated costs shown in consultation documents earlier this year.

Masterton’s was the most affordable at $1925 by 2034, but costs for the required investment in the Homebush wastewater treatment plant from 2035-39 were outside the 10-year water services delivery plan period, so it was anticipated Masterton’s average charge would rise after this.

This latest estimated charge for Masterton was lower than what was consulted on previously.

In a report to South Wairarapa District Council (SWDC), Local Water Done Well programme director Katherine Meerman said South Wairarapa required significant increases in per connection charges due to its current high debt and large capital programme.

She said this was “an acknowledged affordability challenge that will require management”, but noted SWDC was not financially sustainable on a standalone basis and prices in a joint council-controlled organisation model were less than they would be under an alternative in-house model.

SWDC’s draft water services delivery plan said the district faced a unique set of affordability challenges in delivering water services.

”The district’s infrastructure is fragmented, with separate treatment plants and networks for each town, much of which is ageing and in need of critical upgrades over the next decade.

“With relatively low number of households and businesses to share the cost, the financial burden of maintaining and improving this infrastructure is high.”

In a report to Carterton District Council, chief executive Geoff Hamilton said once successfully implemented, a joint water services entity “may provide a template for Wairarapa and Tararua council merger or amalgamation”.

He said water activities made up about 40% of all council activities and that removing these was “likely to generate interest in merging the remaining functions of council”.

Non-harmonisation of prices had been a key discussion point in council negotiations and a minimum nine-year non-harmonisation period had been agreed.

This meant during the first nine years, users would be charged on a cost to serve basis, with costs ring-fenced to the community they applied to, avoiding cross-subsidisation between districts.

There would be a review point after nine years to reconsider the issue and a decision would be made by councils on a shareholding basis, with advice to be provided by the joint Wairarapa-Tararua water services entity’s board.

If the cost to serve principle was removed, any future decision on the issue would be a board decision from year 10 onwards.

Water charges were currently charged as part of council rates.

It was intended that the water services entity would directly charge and invoice customers in the future with the timing of billing transition to be determined through establishment and transition planning.

The councils were aiming for a “go live” date of July 2027.

From this time until June 30, 2034, the water services entity would be spending about $299 million in operational expenditure and $315m in capital expenditure across the four districts.

Masterton District Council and Tararua District Council were set to meet on Wednesday at 9.30am, South Wairarapa would meet at 11.15am, and Carterton would meet at 2.30pm.

-LDR is local body journalism funded by RNZ and NZ on Air

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