Crash
2024-08-11 03:25:11 UTC
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Labour government and since repealed.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.
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.
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Crash McBash
Crash McBash