Council wants feedback on contract cost allocation

The Southland District Council wants feedback from users of its water supplies and sewerage schemes on how they want to pay for the increasing operational costs of those schemes. Council chief executive David Adamson said the water and sewerage operational contract had last been let 12 years ago, and Council is in the final stages of accepting the new contract.

"Because of the length of time since the last contract was let and adding in inflation and the economic situation, we had feared a much greater increase in cost. The actual contract to be let at the end of April shows a 16% increase on the operational costs of water and sewerage. Council is aware that this will still be a burden on ratepayers and we are looking at how we can lessen the impact," Mr Adamson said.

Council had identified the upcoming contract in last year's long term plan, which showed an increase in line with inflation as it had no better information available. Community boards, CDAs and water supply committees were made aware of the likely increase at local estimate meetings in February.

"Now that we have a cost to work with, it was felt appropriate to table a supplementary report at last week's Council draft annual plan approval meeting to seek councillor preference on how the cost is to be met, as the new contract is calculated on a cost per connection basis, which could result in a number of rating increases and decreases," Mr Adamson said.

The two methods to fund the increase detailed in the report were the two extremes - by connection or by an even percentage increase. The connection method, which is based on the way all contractors elected to price the contract, sees individual connection costs vary from a $162 reduction to a $215 increase depending on the scheme. The even percentage method is based on historical costs and ranges from an increase of about $9 through to $59 depending on the historical cost of the water and sewerage services within individual townships.

"The purpose of this report was to inform Council of the current state of play and Council rightly decided to further consult with its community boards, CDA subcommittees, water supply committees and the general ratepayers. A flyer is to be created and will be available online at www.southlanddc.govt.nz and in area offices.

"Those wanting to make comment are asked to make submissions to the Draft Annual Plan, with submissions closing on May 19," he said.

Council also requested a possible transition proposal be explored and staff are looking at the options of including this increase in either the coming financial year or in the following year.

"As with any rate allocation model Council recognises there are winners and losers. Council also recognises that submissions would probably favour the option that provides that scheme with the lowest cost, and wants to emphasise no decision has been made at this stage."