Both acknowledge that there are broader challenges facing local government and the communities that fund and rely on these services. In some parts of the country there has been underinvestment in three waters infrastructure and persistent affordability issues. Alongside this is the need for additional investment to meet improvements in freshwater quality outcomes, increase resilience to climate change and natural hazards, and enhance community well-being. The government’s view is that current service delivery arrangements are no longer fit for purpose and that reform is required.
In response to this, in 2018, the Drinking-Water Standards for New Zealand (DWSNZ) were updated. We have been working towards compliance over the last couple of years but there is still more to do. Some of our schemes require costly capital upgrades which we have budgeted for over the next few years.
Overshadowing the DWSNZ, the Water Services Regulator Act 2020 established a new Crown entity, Taumata Arowai. The new entity will be responsible for administering and enforcing a new drinking water regulatory system.
The Water Services Bill has also been introduced to Parliament and, assuming it becomes law, will introduce major changes to the governance, regulation, funding, management and delivery of water supplies, within the next few years.
This is likely the greatest change in local government service delivery for many years. The government has stated it is their intention that our drinking water, wastewater and quite possibly stormwater assets and operations will pass to a new regional or multi-regional organisation that will be responsible for managing these water supplies and services. Put simply, we as Council, may no longer be delivering these activities on your behalf.
We’ve signed a Memorandum of Understanding which committed us to working with Government and other parties to look at the future delivery of our water services. This includes considering the following design features.
There is a timetable of approximately three years for the reform programme, running through to July 2023, comprising three main phases:
Each phase may be accompanied by funding. We received $7.9 million of funding in the first phase, which we put towards the Ashburton Relief Sewer project which commenced in December 2020.
We expect Government to make policy decisions relating to the reforms in May 2021, to enable legislation to be introduced later in the year. This will include decisions on the main design features, number, and boundaries of the new water entities. Our council will be included in one of the entities, but we will have the opportunity to ‘opt out’.
While we understand the general shape of the reforms, the specifics are uncertain. The effects are likely to be felt in the areas of governance and funding, and consequently in prioritisation, if funds and projects are considered regionally or cross-regionally.
We have not committed to joining any new entity. However, our community will need three waters services whether or not we deliver them. Therefore, our current planning, budgets and timing of projects in this 10 Year Plan is based on ‘business as usual’ (plus the introduction of water meters) - albeit with the certainty that water quality standards will increase. We will come back to discuss any potential changes with you, once we have the full details.
The greatest of these are those related to the increased severity and frequency of extreme weather events. Extreme weather events represent a threat to people and property, including both public and private infrastructure.
We are a member of the Canterbury Climate Change working group looking to procure an assessment of our own emissions and energy consumption. We are also focussed on ensuring our infrastructure is resilient and will cope with changes to our climate.
We have formed Covid-19 response groups to put in place measures to support the economic and welfare recovery of our district. Where possible, we are buying local, and also encouraging others to do the same through our ‘Mid Canterbury Open for Business’ directory.
With a rurally dominated community it is expected that our agriculture sector will be a source of strength for our local economy as we move through the Covid-19 recession. While the local economy is looking to remain reasonably stable, the increasing difficulty to import goods and skilled labourers into New Zealand may impact the delivery of services and therefore our economy.
We have assumed business as usual and have considered rates affordability when preparing our budget forecasts.
Because of this, our district is susceptible to a number of possible natural hazard events such as earthquakes, floods, and storms, which potentially damage property and threaten human life.
The Alpine Fault has a 30% chance of rupturing in the next 50 years. If it does, it will have a significant effect throughout the South Island. To support our preparedness, we are strengthening our infrastructure to withstand the predicted strength of this earthquake.
The stopbanks that protect Ashburton and Tinwald from river flooding are designed to contain a 200 year flood. During heavy rain events river levels and stopbanks will be monitored by Environment Canterbury and close communications maintained with Ashburton District Civil Defence Emergency Management.
We are in the process of updating our emergency response plans for all our communities so they are prepared should a range of disaster events – flood, pandemic, wind storm, earthquake etc occur.
This NPS will significantly affect the way our district is farmed. There will be a flow on effect to our urban sector if the forecasted reduced profits are realised. We have used funding from the Provincial Growth Fund to employ an Agricultural Portfolio Advisor to look into the impact of this NPS and how we can minimise any adverse effects on our agriculture-based economy.
.It is expected the reform will have significant impacts for local government.
The RMA will be replaced with a new Natural and Built Environments Act (NBA) and a Strategic Planning Act (SPA), in line with the recommendations of a review commissioned in 2019. The review also recommended a new Climate Change Adaptation Act (CCA) be passed to deal with legal complexities surrounding managed retreat from coastlines and other areas exposed to the impacts of climate change.
The peaks in the first couple of years have been caused by works being delayed in 2020/21 due to Covid-19, and also the stimulus funding we received from central government which has brought infrastructure projects forward. In addition, we set out an ambitious 10 year plan in 2018. In short, we have a lot of work to get through!
Most of the capital projects are required to be done now and they can’t be delayed or the level of services for you as our residents will be impacted. For example there could be more leaks or additional maintenance required on our water and wastewater networks if we don’t complete the capital programme as planned. A significant project in years 1 and 2 of the plan is the Ashburton Library and Civic Centre which we consulted with the community on in 2019 and that we received strong submitter support to progress. The $20million Covid-9 Response and Recovery funding we received last year for this project is a significant saving for our community.
To try and alleviate this build-up of work, we have looked at the timing of major projects, and if possible moved some to later years. This also helps to manage the impact on rates affordability. However, where there is an immediate need, or a regulatory deadline, this has not been possible. The strain on resources required judicious decision-making and we will be having an increased focus on ensuring we deliver. We have employed extra resources into our project management team. Staff will also be reporting to the elected members through six-weekly activity briefings to provide governance level oversight of these projects. We feel we have got the balance right with this plan.
Our capital expenditure – last three years actual and budgeted next 10 years
There are some actions we can take to increase the affordability today, such as: increasing debt to spread the cost across a longer period of time, using reserves (savings), or not fully funding depreciation (which reduces the amount needed from the general rate).
However, these actions have impacts further down the line. See The Costs for a full discussion of these issues