Discussion:
"Local water done well" policy implementation
(too old to reply)
Crash
2024-08-11 03:25:11 UTC
Permalink
The government recently announced detail:

https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models

It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.

The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.

Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.

This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
--
Crash McBash
Rich80105
2024-08-11 10:15:36 UTC
Permalink
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly. If there are no changes to
rates the only way of repaying the loans is through water charges -
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates - and that will need to
be repaid with interest. Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates. That will be very
difficult for more than half our population to pay.
Crash
2024-08-11 21:32:36 UTC
Permalink
Post by Rich80105
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly.
That is the sort of meaningless conjecture you make when Labour and
the Greens are the Opposition. Yes, those on low incomes are hit
hardest but that applies to paying for all life necessities so is a
given.
Post by Rich80105
If there are no changes to
rates the only way of repaying the loans is through water charges -
Correct - and as it should be.
Post by Rich80105
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates - and that will need to
be repaid with interest.
Correct. What a wonderful concept - the cost is borne by those who
use it. When I was a Wellington ratepayer, water was not metered, so
Wellingtonians will need to pay for water meters to be installed or
continue to pay flat-rate water charges.
Post by Rich80105
Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates. That will be very
difficult for more than half our population to pay.
That is pure political rhetoric - unless you can cite a reputable
source of that conjecture.

It is inevitable that one way or another we will pay more for water
availability, but at least we will now be paying through our local
council, ultimately controlled by elected representatives. Those that
do not receive water services (ie are not on town supply water or
reticulated waste and storm water services) will not be forced to
subsidise water users through taxpayer-funded water services.
--
Crash McBash
Rich80105
2024-08-11 23:09:06 UTC
Permalink
Post by Crash
Post by Rich80105
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly.
That is the sort of meaningless conjecture you make when Labour and
the Greens are the Opposition. Yes, those on low incomes are hit
hardest but that applies to paying for all life necessities so is a
given.
There are options, Crash. The point I was making is that this is a
move away from progressive income tax to user-pays, making little
difference to the wealthy, but pushing many low paid and beneficiaries
further into poverty.

The government has said that a council may borrow up to 5 times is
current rates - and given recent increases, that amounts to a lot of
money for many Councils, but the Government clearly believes that they
may need that capacity to borrow. Whatever they do borrow at this
stage is to bring 3-water systems up to acceptable standards, and
Councils will want that money repaid as quickly as possible - they
will have other projects to finance such as local roads,
sub-divisions, Council properties etc. So it is possible that they
will want that money repaid over say 10 years. That may mean that
they need to increase rates by 50% for this work alone to keep their
finances under control. That will of course flow directly through to
rents, and hence to accommodation assistance required by the poorest
tenants.
Post by Crash
Post by Rich80105
If there are no changes to
rates the only way of repaying the loans is through water charges -
Correct - and as it should be.
Post by Rich80105
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates - and that will need to
be repaid with interest.
Correct. What a wonderful concept - the cost is borne by those who
use it. When I was a Wellington ratepayer, water was not metered, so
Wellingtonians will need to pay for water meters to be installed or
continue to pay flat-rate water charges.
Post by Rich80105
Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates. That will be very
difficult for more than half our population to pay.
That is pure political rhetoric - unless you can cite a reputable
source of that conjecture.
It is inevitable that one way or another we will pay more for water
availability, but at least we will now be paying through our local
council, ultimately controlled by elected representatives. Those that
do not receive water services (ie are not on town supply water or
reticulated waste and storm water services) will not be forced to
subsidise water users through taxpayer-funded water services.
Central government is also elected, and many believe that the
electorate for the NZ Government is vastly better informed than the
electorates for individual Councils. Central government is also more
experienced in managing large infra-structure projects - do you
believe that the Councilors or Council Officers in your local area are
as competent? Still, there are plenty of consultants available to help
at $500 per hour . . .

We have also seen just how much control local authorities really have
when their only power is to appoint Directors . . .
Crash
2024-08-12 02:48:48 UTC
Permalink
Post by Rich80105
Post by Crash
Post by Rich80105
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly.
That is the sort of meaningless conjecture you make when Labour and
the Greens are the Opposition. Yes, those on low incomes are hit
hardest but that applies to paying for all life necessities so is a
given.
There are options, Crash. The point I was making is that this is a
move away from progressive income tax to user-pays, making little
difference to the wealthy, but pushing many low paid and beneficiaries
further into poverty.
We are talking about water assets development and maintenance, not
social policy. For most councils (but not all) spending on water
services will have to increase and as is always the case those on low
incomes will be adversely affected. We all have to pay.
Post by Rich80105
The government has said that a council may borrow up to 5 times is
current rates
Cite please. In the press release I cited in my original post, It was
clear that water assets must be moved to a CCO, and that CCO could
borrow from the LGFA, up to 500% of "operating revenues". This
clearly identifies that it is the CCO doing the borrowing, and the
level of debt is related to CCO revenues, so it has nothing to do with
Council debt.

This structure also eliminates the possibility that Councils will use
the value of water assets to secure Council debt. That will not be
possible - debt sourced from the LGFA by the CCO is reserved for water
infrastructure.
Post by Rich80105
- and given recent increases, that amounts to a lot of
money for many Councils, but the Government clearly believes that they
may need that capacity to borrow. Whatever they do borrow at this
stage is to bring 3-water systems up to acceptable standards, and
Councils will want that money repaid as quickly as possible - they
will have other projects to finance such as local roads,
sub-divisions, Council properties etc. So it is possible that they
will want that money repaid over say 10 years. That may mean that
they need to increase rates by 50% for this work alone to keep their
finances under control. That will of course flow directly through to
rents, and hence to accommodation assistance required by the poorest
tenants.
All completely untrue. The new CCOs will be able to borrow to fix
water assets and services. Nothing more, nothing less. In fact it is
a feature of this policy that borrowing to fund water assets and
services is ring fenced and cannot be spent on anything else.
Post by Rich80105
Post by Crash
Post by Rich80105
If there are no changes to
rates the only way of repaying the loans is through water charges -
Correct - and as it should be.
Post by Rich80105
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates - and that will need to
be repaid with interest.
Correct. What a wonderful concept - the cost is borne by those who
use it. When I was a Wellington ratepayer, water was not metered, so
Wellingtonians will need to pay for water meters to be installed or
continue to pay flat-rate water charges.
Post by Rich80105
Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates. That will be very
difficult for more than half our population to pay.
That is pure political rhetoric - unless you can cite a reputable
source of that conjecture.
It is inevitable that one way or another we will pay more for water
availability, but at least we will now be paying through our local
council, ultimately controlled by elected representatives. Those that
do not receive water services (ie are not on town supply water or
reticulated waste and storm water services) will not be forced to
subsidise water users through taxpayer-funded water services.
Central government is also elected, and many believe that the
electorate for the NZ Government is vastly better informed than the
electorates for individual Councils. Central government is also more
experienced in managing large infra-structure projects - do you
believe that the Councilors or Council Officers in your local area are
as competent?
Absolutely. I voted in the last local body elections. Those
councilors and local board members are a great deal more responsive to
local needs than bureaucrats in Wellington.
Post by Rich80105
Still, there are plenty of consultants available to help
at $500 per hour . . .
Maybe in Wellington. My local council makes little use of such people.
Post by Rich80105
We have also seen just how much control local authorities really have
when their only power is to appoint Directors . . .
Yes we have - and vastly more powerful than with the Water Entities
Labour legislated for without any mandate at all, based on a report
they concealed from their coalition partner at the time.
--
Crash McBash
Tony
2024-08-12 21:27:16 UTC
Permalink
Post by Rich80105
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly. If there are no changes to
rates the only way of repaying the loans is through water charges -
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates - and that will need to
be repaid with interest. Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates. That will be very
difficult for more than half our population to pay.
There is no increase in cost- That is a lie.
Gordon
2024-08-13 05:01:24 UTC
Permalink
Post by Rich80105
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly.
First off, it has been agreed that some improvement/upgrades are needed and
this is understood by most people that this will cost money. So the question
is how best to share the burden.

The amount of rates paid is based mostly on the value of you property. So if
the rates go up by x% it is the rich/wealthy people who pay more.
Post by Rich80105
If there are no changes to
rates the only way of repaying the loans is through water charges -
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates
No it is 500% of the value of the water network infrastructure, whci the
Governmets considers to be doable over 30 repayment. Similar to house
mortgages.
Post by Rich80105
- and that will need to
be repaid with interest. Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates.
Which rates do you refer to here? The present water rates or the rates paid
for on the proptery?
Post by Rich80105
That will be very
difficult for more than half our population to pay.
Let us remember that the repayment amounts will be overseen by accountable
elected representives.
Rich80105
2024-08-13 09:23:00 UTC
Permalink
Post by Gordon
Post by Rich80105
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
That must be why quite a few local Councils have increased rates this
year by anything up to around 15% more than previously . . .
Post by Gordon
Post by Rich80105
Post by Crash
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed.
Sadly we will not see how those proposals would have worked out in
practice - they were essentially similar to the split between central
government and local government for other issues - local government
would look after local issues, government would look after the country
level issues - which for water could have been similar to electricity,
with the heavy work of major pipelines being looked after by
Government, and delivery from those major pipes the responsibility of
local government, with water treatment somewhere in between.

The current government spent $3Bn on handouts to landlords and would
rather your rates went up than fund even health, let alone water . . .
Post by Gordon
Post by Rich80105
Post by Crash
However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly.
First off, it has been agreed that some improvement/upgrades are needed and
this is understood by most people that this will cost money. So the question
is how best to share the burden.
The amount of rates paid is based mostly on the value of you property. So if
the rates go up by x% it is the rich/wealthy people who pay more.
Post by Rich80105
If there are no changes to
rates the only way of repaying the loans is through water charges -
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates
No it is 500% of the value of the water network infrastructure, whci the
Governmets considers to be doable over 30 repayment. Similar to house
mortgages.
I haven't seen a reference to that change - what I did hear on the
early announcements was that Councils would be able to borrow up to 5
times their rates income. Lenders are not interested in the capital
value of unsaleable assets, they are interested in the capacity to pay
back the capital and interest.
Post by Gordon
Post by Rich80105
- and that will need to
be repaid with interest. Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates.
Which rates do you refer to here? The present water rates or the rates paid
for on the proptery?
Current rates - you do realise that they differ greatly around the
country. Those in most trouble with water are those that have elected
Councilors who spouted the nonsense that low rates shows good
management - with those same people now of course changing their minds
. . .

Gross income from rates is not the same as disposable income to a
Council; lenders will in practice look to see how much is likely to be
available to service loans, but since many have demonstrated an
ability to significantly increase rates, it is quite a complex matter
of judgement
Post by Gordon
Post by Rich80105
That will be very
difficult for more than half our population to pay.
Let us remember that the repayment amounts will be overseen by accountable
elected representives.
Indeed, and as we are seeing the accountable elected representatives
that matter most are Ministers of the Crown. They will tell the local
government Councils (and their elected Councilors) what to do.
Crash
2024-08-13 09:56:31 UTC
Permalink
Post by Rich80105
Post by Gordon
Post by Rich80105
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
That must be why quite a few local Councils have increased rates this
year by anything up to around 15% more than previously . . .
Rich who are you responding to? You have already responded to my
original post so this is irrational.
Post by Rich80105
Post by Gordon
Post by Rich80105
Post by Crash
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed.
Sadly we will not see how those proposals would have worked out in
practice - they were essentially similar to the split between central
government and local government for other issues - local government
would look after local issues, government would look after the country
level issues - which for water could have been similar to electricity,
with the heavy work of major pipelines being looked after by
Government, and delivery from those major pipes the responsibility of
local government, with water treatment somewhere in between.
The current government spent $3Bn on handouts to landlords and would
rather your rates went up than fund even health, let alone water . . .
See above.
Post by Rich80105
Post by Gordon
Post by Rich80105
Post by Crash
However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly.
First off, it has been agreed that some improvement/upgrades are needed and
this is understood by most people that this will cost money. So the question
is how best to share the burden.
The amount of rates paid is based mostly on the value of you property. So if
the rates go up by x% it is the rich/wealthy people who pay more.
Post by Rich80105
If there are no changes to
rates the only way of repaying the loans is through water charges -
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates
No it is 500% of the value of the water network infrastructure, whci the
Governmets considers to be doable over 30 repayment. Similar to house
mortgages.
I haven't seen a reference to that change - what I did hear on the
early announcements was that Councils would be able to borrow up to 5
times their rates income. Lenders are not interested in the capital
value of unsaleable assets, they are interested in the capacity to pay
back the capital and interest.
Post by Gordon
Post by Rich80105
- and that will need to
be repaid with interest. Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates.
Which rates do you refer to here? The present water rates or the rates paid
for on the proptery?
Current rates - you do realise that they differ greatly around the
country. Those in most trouble with water are those that have elected
Councilors who spouted the nonsense that low rates shows good
management - with those same people now of course changing their minds
. . .
Gross income from rates is not the same as disposable income to a
Council; lenders will in practice look to see how much is likely to be
available to service loans, but since many have demonstrated an
ability to significantly increase rates, it is quite a complex matter
of judgement
Post by Gordon
Post by Rich80105
That will be very
difficult for more than half our population to pay.
Let us remember that the repayment amounts will be overseen by accountable
elected representives.
Indeed, and as we are seeing the accountable elected representatives
that matter most are Ministers of the Crown. They will tell the local
government Councils (and their elected Councilors) what to do.
Totally incorrect Rich, unless you consider local body elections to be
a waste of time and pointless.

My local councilors are vastly more access able than my local MP. That
is unsurprising as the number of ratepayers they represent is vastly
less than the number of voters in my electorate.
--
Crash McBash
Gordon
2024-08-13 05:01:24 UTC
Permalink
Post by Rich80105
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Many do not believe it is a better approach; it is likely to hit those
that are low to average income earners hardest as rates and water
costs are likely to rise significantly.
First off, it has been agreed that some improvement/upgrades are needed and
this is understood by most people that this will cost money. So the question
is how best to share the burden.

The amount of rates paid is based mostly on the value of you property. So if
the rates go up by x% it is the rich/wealthy people who pay more.
Post by Rich80105
If there are no changes to
rates the only way of repaying the loans is through water charges -
and the government is anticipating that for some borrowing will need
to be up to 5 times the level of current rates
No it is 500% of the value of the water network infrastructure, whci the
Governmets considers to be doable over 30 repayment. Similar to house
mortgages.
Post by Rich80105
- and that will need to
be repaid with interest. Lending terms are not yet negotiated, but
the increase in cost through water charges each year may well need to
average between 50% and 100% of current rates.
Which rates do you refer to here? The present water rates or the rates paid
for on the proptery?
Post by Rich80105
That will be very
difficult for more than half our population to pay.
Let us remember that the repayment amounts will be overseen by accountable
elected representives.

Gordon
2024-08-11 22:07:57 UTC
Permalink
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
This seems to be a development of the days gone past when the Councils could
and did borrow with permission from the Government. Small towns needed to
set up a sewerage scheme and loan money was used for this. The loan was paid
back over the life of the scheme.

The CCO is going to be the gatekeeper, the checks and balance of the loans
and there is a limit. The CCO is basically the bank in this situation.

The important point here is that the Councils can decide what to do and are
accountable to the people. Something that 3 waters was unlikely to do.
Post by Crash
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Rich80105
2024-08-11 23:48:35 UTC
Permalink
Post by Gordon
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
This seems to be a development of the days gone past when the Councils could
and did borrow with permission from the Government. Small towns needed to
set up a sewerage scheme and loan money was used for this. The loan was paid
back over the life of the scheme.
Local Authorities bonds typically paid from 0.25 to 0.5% more than
government stock - and when things went wrong government still had to
step in to bail them out. Borrowing by government and on-lending to
local authorities replaced direct borrowing by local authorities, and
as far as I am aware that still happens.
Post by Gordon
The CCO is going to be the gatekeeper, the checks and balance of the loans
and there is a limit. The CCO is basically the bank in this situation.
No, that would be the LGFA
Post by Gordon
The important point here is that the Councils can decide what to do and are
accountable to the people. Something that 3 waters was unlikely to do.
Many people regard Councils as being _less_ accountable than central
government.
Post by Gordon
Post by Crash
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Water meters are almost inevitable - they have been introduced in some
places, and they will ensure that commercial use of water can be
appropriately charged. Fragmenting the water system is however not
necessarily the best way to manage supply of water; it is a major
change that has had little discussion or consultation from this
government.
Tony
2024-08-12 21:26:35 UTC
Permalink
Post by Rich80105
Post by Gordon
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
This seems to be a development of the days gone past when the Councils could
and did borrow with permission from the Government. Small towns needed to
set up a sewerage scheme and loan money was used for this. The loan was paid
back over the life of the scheme.
Local Authorities bonds typically paid from 0.25 to 0.5% more than
government stock - and when things went wrong government still had to
step in to bail them out. Borrowing by government and on-lending to
local authorities replaced direct borrowing by local authorities, and
as far as I am aware that still happens.
Post by Gordon
The CCO is going to be the gatekeeper, the checks and balance of the loans
and there is a limit. The CCO is basically the bank in this situation.
No, that would be the LGFA
Post by Gordon
The important point here is that the Councils can decide what to do and are
accountable to the people. Something that 3 waters was unlikely to do.
Many people regard Councils as being _less_ accountable than central
government.
Post by Gordon
Post by Crash
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
Water meters are almost inevitable - they have been introduced in some
places, and they will ensure that commercial use of water can be
appropriately charged. Fragmenting the water system is however not
necessarily the best way to manage supply of water; it is a major
change that has had little discussion or consultation from this
government.
Bullshit, It was signalled before the election so we had the opportunity to
vote for it or not in effect.
Lawrence D'Oliveiro
2024-08-13 04:03:51 UTC
Permalink
Post by Rich80105
Water meters are almost inevitable - they have been introduced in some
places, and they will ensure that commercial use of water can be
appropriately charged.
Would not have been necessary, I think, if so much of our fresh water
supply hadn’t become so polluted.
Rich80105
2024-08-13 10:42:33 UTC
Permalink
On Tue, 13 Aug 2024 04:03:51 -0000 (UTC), Lawrence D'Oliveiro
Post by Lawrence D'Oliveiro
Post by Rich80105
Water meters are almost inevitable - they have been introduced in some
places, and they will ensure that commercial use of water can be
appropriately charged.
Would not have been necessary, I think, if so much of our fresh water
supply hadn’t become so polluted.
That is certainly a big issue in some areas - in Canterbury,
Christchurch lasted for a long time drawing on aquifers that needed
little processing before being delivered to residents, but now those
underground sources are dangerously polluted from farming activities -
some small towns have experienced higher than expected levels of
still-births and birth defects as a result. We are using water at
profligate levels with some users (bottling water for export being a
small but often raised example) not paying a fair share of costs of
producing drinkable water. The highway model seems to be accepted by
most people - the equivalent for water would be central government
looking after the big issues of bulk supply, with local reticulation
up to local authorities - but the current government just wanted to
avoid costs that needed to be paid for by income taxes, and have
passed the problem on to unprepared and inexperienced Councils.

Water meters will reduce demand, but at significant cost - one good
result however is that leaks on private property are likely to be
identified fairly quickly. But overall, the increased complications
have an overhead cost - expect the cost of calculating and charging to
increase overall costs by say 5% sort term, reducing to say 3% longer
term.
Crash
2024-08-12 02:52:54 UTC
Permalink
Post by Gordon
Post by Crash
https://www.beehive.govt.nz/release/unlocking-local-water-done-well-new-water-service-delivery-models
It seems to me that the Government will require each council to move
their water services assets and operation to a dedicated CCO along the
same lines as Auckland Council and Watercare. Some councils may well
do this on a regional basis, particularly if there is an existing
regional council.
The government has established the New Zealand Local Government
Funding Agency Limited (LGFA) to assist these CCOs with access to
borrowed funding for long-term development. It should be noted that
it is the CCO that will incur the debt and my reading of this press
release is that the lending limit of up to 500% of revenues references
water rates income earned by the CCO.
This seems to be a development of the days gone past when the Councils could
and did borrow with permission from the Government. Small towns needed to
set up a sewerage scheme and loan money was used for this. The loan was paid
back over the life of the scheme.
The CCO is going to be the gatekeeper, the checks and balance of the loans
and there is a limit. The CCO is basically the bank in this situation.
Not quite correct Gordon. The CCO is the owner of water assets and
the provider of water services. It will be able to borrow, but that
debt is ring fenced to provide asset and service maintenance. It is
the LGFA that is the banker.
Post by Gordon
The important point here is that the Councils can decide what to do and are
accountable to the people. Something that 3 waters was unlikely to do.
Correct.
Post by Gordon
Post by Crash
Auckland Council already meets the requirements, other councils will
have to form a water CCO and set water rates that go to said CCO.
Either way, water assets, revenue and expenses are ring fenced in a
dedicated CCO as is debt that is related to water assets. If a CCO
borrows from LGFA there will be no direct impact to those who pay
rates to the owning council, but there may need to be raised charges
for water services.
This is a vastly better approach than the reforms enacted by the last
Labour government and since repealed. However some councils will
inevitably face major change when moving to a water CCO, particularly
if they don't meter water usage so cannot charge for measured
consumption. However this is a challenge they must face - and those
councils who have good water infrastructure will be able to move to
the water CCO model with little impact to ratepayers.
--
Crash McBash
Loading...