Council rates, spending up … but it’s not yet fixing water, wastewater issues

By Martin Freeth

South Wairarapa District Council increased its rates take by $5 million last year _ but very little of that extra money went into operating and upgrading wastewater and town water supply systems.

The jump in rates income was used mainly to support increases in SWDC’s operational spending on community facilities and services – including parks and reserves, swimming pools, libraries and public buildings – and spending on planning and regulatory activities. The latter arise from the Council’s statutory obligations in respect of spatial planning, building consents, public health and “wellbeing.”

Last year, ended 30 June 2024, saw ratepayers make a total of $26.2 million in cash payments to SWDC – an increase from the previous year’s rates take of $21.1 million. That’s a 24% jump during a year when South Wairarapa’s ratepayer numbers rose only 2% (to 7,404 rating units at 30 June.)

The numbers are reported in SWDC’s financial statements and annual report for 2024 which were publicly released on 21 November after being formally adopted by the Council. The adoption was slightly late because of a auditing delay within Audit New Zealand, which has apologized publicly.

The Statement of Income and Spending for 2023-24 shows SWDC’s total expenditure was $34.6 million, up 3.2% from the previous year. But within the total, spending in the areas of community facilities and services, and planning and regulatory activities jumped by 14%. 

SWDC spent $1.7 million more in these two areas compared with the previous year.

Wastewater and water supply

In contrast, the additional spend on SWDC’s wastewater and water supply areas was only $386,000. In fact, the two areas accounted for only 25% of SWDC’s total spend of ($34.6 million) in 2023-24 There has yet to be any borrowing increase that would fund major new capital works on wastewater treatment and water supply.

Relatively low operational and capital spending last year are in sharp contrast to the concern about wastewater and water supply among South Wairarapa people – note the current freeze on new sewerage connections in Martinborough and Greytown, and the many indications of costly, major works that will be required to upgrade and expand systems in each of the towns in the years ahead.

For 2023-24, SWDC can report some improvement in its performance in wastewater operations, with resource consent compliance, response times to faults and public satisfaction measures all up from the previous year. 

But on town water supply only 57% of ratepayers and residents are satisfied, and the loss rate of water from reticulation pipes is still high at 42%. (This year, Martinborough and Pirinoa water supply quality is above the Ministry of Health bacteriological assurance standard, but not Greytown or Featherston).

In 2023-24, capital spending on wastewater systems was only $1.23 million (mainly to complete a new pumping station in Donald Street, Featherston) and on water supply only $1.1 million (including installation of a back-up generator at the Martinborough bore site, and new water

quality analysers at the three towns’ treatment plants).

Future uncertainties

The Mayor and Chief Executive’s “message” on the report’s opening pages confirms that preparations for desludging the Martinborough and Greytown wastewater treatment plants are under way. Hard “laydown areas” for holding the sludge are due for construction by 31 December

2024, and the actual removal of this material from the ponds into “geobags” will run from early 2025 to “around” June.

Beyond this statement, the Mayor and Chief Executive’s message – despite running five pages and listing various “significant achievements” – is completely silent on peoples’ wastewater and water supply concerns, and on the major works in prospect for these areas, with all the implications that follow for SWDC’s borrowing, operational spending and rating.

Elsewhere, deep in notes to the financial statements, SWDC acknowledges the statutory requirement for all councils to develop new Water Services Delivery Plans by 3 September next year. These plans must set out how water services will be delivered, financed, and implemented. After evaluation of two joint, multi-council delivery options, SWDC voted on 13 November to focus on the so-called “Wai+T” model involving councils in the Wairarapa region and Tararua District. 

While uncertainty reigns, SWDC assures ratepayers that it will not go bust in entering such an arrangement. The “Wai+T” model, the SWDC note states, will “not directly challenge the viability of Council, or its assumption of maintaining going concern status.”

Other key numbers

 SWDC spent $9.4 million on land transport and roading operations in 2023-24 – in effect, 27% of total Council expenditure – but two thirds of this was funded by Waka Kotahi subsidies (not rates or fees, grants and other income). The year’s biggest achievement was rebuilding a section of the Hinekura Road.

 Total cash payments to suppliers and employees jumped 14% to $30.1 million – this sum is spread across all areas of SWDC operation.

 SWDC and the three community boards gave grants totalling $352,700 during the year to community groups, sports entities and the ambulance service.

 SWDC had a total of 74 employees at 30 June 2024. The full-time equivalent number at that date was 69 employees – nine higher than at 30 June 2023.

 The former Chief Executive, Harry Wilson, was paid a total of $325,416 in his final period of employment, before leaving in May 2023. The new Chief Executive, Janice Smith, was paid

$173,400 during 2023-24, for approximately eight months of the year.

 SWDC had reduced its borrowing to $26.9 million by 30 June 2024, from $28.9 million one year earlier. Interest costs are rising, with a weighted average rate of 3.4% p.a. on borrowing at the latest

balanced date (2.27% in 2023).

    SWDC has a $654 million balance sheet – Council owned or leased property, plant and equipment was valued at $626 million at 30 June. It’s a large business by any measure.