Auckland Council officials believe the government’s proposed Three Waters reforms could eventually deliver bills up to 30 per cent lower than the under the status quo.
That saving could be reached by 2031, despite the mayor Phil Goff saying there was “little benefit to Aucklanders”.
The council’s finance officials forecast annual bills rising from $1334 to around $2000 by 2031 under the status quo, compared to almost flatlining under various Three Waters scenarios.
In a June presentation to Goff, council officials also concluded the proposed reforms “will facilitate increased capital expenditure” and “lead to better asset quality and drive improved environmental outcomes”.
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The government proposes in December merging the water operations of 67 local councils into just four publicly-owned entities, arguing they would be more efficient and enable costly infrastructure upgrades.
Goff has been a vocal opponent, arguing Auckland’s council-owned water and wastewater networks are in good shape and efficient, and the reforms would take away ratepayer-owned assets and direct control.
However in the June presentation, officials forecast lower bills under the proposed merger of Auckland’s networks into an entity stretching to Cape Reinga in the Far North.
They also suggested “highlighting potential under-investment in Northland councils’ three waters infrastructure may also focus attention on Auckland’s stormwater network” where spending has stepped up.
The forecasts are a qualified estimate, and officials said they did not have all the data needed to make economic forecasts.
The Auckland Council staff were unable to test a forecast commissioned by the government suggesting Auckland water bills could fall as low as $803 by 2051.
“Water Industry Commission for Scotland (WICS) arrived at the $803 figure using highly specialised proprietary software and a concept known as Monte Carlo simulation,” said the council in a statement.
Much of the criticism of the Three Waters reforms has been around the transfer of ratepayer assets into state-controlled entities, and reduced direct political accountability to customers.
However the financial consequences for Auckland Council have not yet been made clear, such as whether the council’s books would be better if the reforms go through.
Goff wanted to vary the status quo in which borrowing by the council company Watercare is limited by the council’s overall debt cap, which could be government underwritten while ownership remained in the city.
The previous chief executive of Watercare, Raveen Jaduram, had suggested in October 2020 it would be better if a new public sector shareholder removed it from the constraints of council ownership.
Watercare has had to end its tradition of price rises in line with council rate increases of around 3.5 per cent, hiking them to 7 and 9 per cent for much of the next decade, to help fund urgent water supply boosts following the 2020 drought.
The company’s board in December set capital spending for the next decade $827 million lower than it would have preferred, due to curbs on how much the council could borrow.
In a statement, following the release of the material, a spokesman for Goff said: “The Mayor and Council support the overall reform objectives and agree that regulation and greater access to capital would drive efficiency savings and benefit Aucklanders.
”What the council does not support is the governance model proposed by the government, which removes accountability and responsiveness to communities through their elected representatives.”
Goff has been appointed to a government working group on governance.