This week Hutt City Council will consider the level of investment needed for water infrastructure, as part of work to develop the Long Term Plan, which sets out Council’s plans for the ten years ahead.
At its Long Term Plan subcommittee meeting on Thursday, Council will review the latest advice and investment options from Wellington Water. That advice identifies that over the next thirty years 60 per cent of Lower Hutt’s water network will need to be replaced, at a cost of $1.3 billion.
Lower Hutt Mayor Campbell Barry says the latest information confirms initial information Wellington Water presented to Council earlier this year, and highlights the scale of the challenge facing the city.
“We know that in Lower Hutt we are facing a trifecta of issues related to our water infrastructure: ageing infrastructure, significant urban growth, and historic underinvestment. The advice we are now receiving from our water experts shows the financial costs of fronting up to these challenges,” Campbell Barry says.
“Wellington Water has told us that the amount we currently invest to maintain and develop Three Waters infrastructure is not sustainable. As Mayor, I’m not prepared to ignore the advice of experts – it’s clear we must act to address this serious issue as part of our Long Term Plan.”
The report this week sets out possible investment options for the Long Term Plan, including a low investment option and a mid-investment option. Both options would result in a significant increase in capital and operational expenditure, and an increase in borrowings. At this stage, modelling suggests an indicative rates rise of between 4 per cent and 6 per cent for water infrastructure investment alone.
Mayor Barry says that affordability for residents is front of mind for Council, and the need to balance the investment required with the impact of the current economic climate.
“I am conscious that we are making these decisions at a time which is both tough and uncertain for people right across our city. It is with this in mind that I will be asking staff to consider affordability, and how we can soften the impact of the investment needed.”
“Ultimately though, this is not about investing in nice-to-haves. The reality is we need to spend more on our water pipes and associated water infrastructure to avoid large scale network failure. If we avoid fronting up to this issue now, we put at risk the services people expect and rely on every day,” Campbell Barry says.
Council’s Chief Executive Jo Miller says maintaining the water network is essential to a thriving and resilient city.
“Our city and residents’ wellbeing is at the heart of a functioning water network. We must have safe drinking water and effective stormwater and wastewater systems. At the same time we need to be looking at our relatively high water consumption regionally and take a close look at the options to bring this more into line with others. It’s important that whatever approach is taken, consideration is given to reducing our impact on the environment and progressing towards zero carbon.”
Hutt City Council is considering investment options against the backdrop of current Government reforms concerning the management of Three Waters infrastructure. Local councils have been granted some short term funding to offset some immediate costs of needed investment.
Wellington Water estimates the funding investment required for the next 10 years on a mid option scenario includes a linear 20% increase in operating costs to maintain the city’s water assets and $375M in renewal costs. A low option puts the investment needed as a 20% stepped increase in operating costs and a lower renewals budget of $204M. A further $64M is needed to address high population growth in Wainuiomata, Kelson and Petone, with an estimated $200M additional investment for growth elsewhere.
A regional priority is to drive the consumption of drinking water down so that the need for an additional regional water supply can be deferred. Investment in water meters of $25M, included in the mid option, will help achieve this.
Earlier in the year, Wellington Water presented to Hutt City Council and advised immediate investment was needed in water infrastructure. As part of the 2020/2021 Annual Plan two-thirds of the increase in rates revenue was set aside for water infrastructure. The details of that investment are listed below.
Key water projects to be delivered in 2020/21 include:
|Wastewater network renewals||$2.4M|
|Stormwater network upgrades||$2.3M|
|Water main renewal in Port Road||$1.7M|
|Seaview Wastewater Plant Seismic Upgrade||$1.2M|
|Awamutu Stream Upgrades||$1.0M|
|Naenae Reservoir Improvements||$700k|