Connect to the Pines wastewater treatment plant in Rolleston

This would provide connections for central Darfield and growth areas of Darfield and Kirwee, and provide capacity for the existing residential properties over time. For more detail on the location please check the map above.

Impact on rates

Funding this development will be achieved through:

• Government stimulus grant of $10 million
• Borrowings of $28 million, to be repaid through rates on existing properties which benefit from the scheme, and development contributions for future new properties.

The information below summarises the financial impact on current ratepayers who benefit from this scheme, and those who will benefit in the future through new developments.

Assuming a ratepayer connects their property to the proposed scheme in 2025/26, the total cost of connecting will be as follows:

A. Existing properties

The share of the Council’s cost of the capital works can be charged to ratepayers as an annual targeted rate. This will not cover the cost to physically connect the property to the scheme, which will need to be paid by the property owner. The targeted rate is based on an interest rate of 3%, with rate payments being made for 40 years. The amount will change as interest rates change. In addition to the annual targeted rate, ratepayers will also pay the annual district-wide rate, which is paid by all ratepayers that are connected to a Council wastewater system. The estimated rate increase for a typical residential ratepayer in Darfield and Kirwee, assuming connection being available in 2025/26, will be:

Properties that constitute more than a single household unit equivalent (HUE) will pay an additional $6,085 per HUE and this will increase the loan rate proportionately.

B. New properties

Land developers in Darfield and Kirwee will be able to connect to the new scheme by paying a development contribution. This will be used to fund a proportionate cost of the connection to the treatment plant in Rolleston. It will not cover the cost of local reticulation within the subdivision which must be provided by the land developer. Subject to consultation on amendments to the Development Contributions Policy (see p. 45), the amount payable will be $6,085 (including GST) per HUE assuming a connection in 2025/26.

There is some uncertainty around the funding of future capital works for wastewater, as the Government is proposing to reform the provision of this service. This may mean there will be a different way of paying for the proposed new scheme. The impact of the proposed reforms is not known at this time.

Cost

The total cost of the capital works required to reticulate the two townships, construct the pipeline to connect to the Pines wastewater treatment plant and pay for a share of the cost of the treatment plant is $38 million. The work will initially be funded by borrowing and by a one-off Government stimulus grant of $10 million.

The Council’s decision to use the Government’s stimulus grant to fund the pipeline means the cost per house has been reduced by about $5,000.

Impact on debt

We would need to borrow an extra $28 million. This would be repaid by ratepayers in Darfield and Kirwee through a local targeted rate ($17 million), and by land developers benefiting from the new wastewater system through development contributions ($11 million).

Option 1 is our preferred option, based on the environmental and public health benefits of a modern, reticulated system, as opposed to septic tanks. This option will also better provide for the ongoing population growth this area is experiencing, allowing for sustainable intensification of development and a wider range of housing types.

As noted above, the Council has a one-off opportunity to access Government stimulus funding for this project, which reduces the overall cost to households.