Charges for water supply infrastructure
The Council provides high quality drinking water to more than 80% of the district’s population, through 30 water schemes, supplying nearly 20,000 households.
Since 2015, a standard district-wide rating system has been in place for all Selwyn properties connected to a Council water supply. Charges include a combination of a fixed base rate (through a targeted rate) and a variable amount based on the amount of water used (volumetric charge) as measured by water meter.
In Selwyn, for the majority of households, the current water rate includes a fixed charge of $244 a year, plus an additional volumetric charge of 48 cents per cubic metre of water (1,000 litres) – based on a household’s water meter reading.
We now need to review these changes, so that we are making adequate provision for future growth and security in our water supply infrastructure network, to encourage water conservation, and to provide for any impact from the Government’s Three Waters review.
Option 1: Our preferred option
Increase water supply charges to provide for quality improvements and demand management
For households connected to a Council water supply, we’re proposing to increase the annual Water Supply Targeted Rate from $244 to $264. At the same time we propose to increase the variable volumetric based on the amount of water used, from 48c to 52c per cubic metre for metered supplies, and from $175 to $190 per water unit for restricted supplies.
This is an 8% increase compared with the planned 4% increase which was indicated in the Long-Term Plan 2018-2028.
The increase will help the Council to keep pace with increasing demand for water supply quality upgrades, so that we can maintain the continued high level of service for our growing communities. A number of reticulation and scheme capacity upgrades are planned this coming year.
The change will also support the need for continued upgrading of water supplies to provide a higher level of treatment and redundancy.
This is particularly important as it is predicted that the security and quality of groundwater will decline over the next 10 years, while at the same time a higher level of service is expected.
Increasing the volumetric charging will help with water demand management, providing added incentive for households to use water wisely, so that those who use less water pay less. This will also reduce the need for expensive capacity upgrades.
What are the other options?
Maintain the 4% increase originally indicated in the Long-Term Plan 2018-2028:
- Water Supply Targeted Rate increases from $244 to $254
- Volumetric charge increase from 48c to 50c per cubic metre.
- Per water unit rate for restricted supplies increases from $175 to $183.
This level of increase would mean that greater increases would likely be required in future years. It would also have a reduced impact on water demand management measures, as the effectiveness of volumetric charging on water use would be lessened.
Maintain the level of fixed charge at the current level
- Water Supply Targeted Rate remains at $244
Adopt a higher level of increase for the variable charge (volumetric, based on water use)
- Volumetric charge increases from 48c to 58c per cubic metre.
- Per water unit rate for restricted supplies increases from $175 to $212.
This option would have a greater impact on water demand management measures, as the effectiveness of volumetric charging on water use would be increased, encouraging households to use water wisely.
The impact of the preferred option on different ratepayers, depending on their water use, is summarised in the table below.
About water charges
All councils in New Zealand rate for water supply. Water rates help councils pay for the ongoing costs of operating the water supply, and provide funds for maintaining and renewing the water supply infrastructure so that it continues to operate effectively. Note – these are not charges for water itself – water is free. Water supply charges cover the costs involved in sourcing and supplying water, including water treatment, renewals and upgrades, and compliance.
Some councils charge households a fixed water rate, some charge a rate based on a property’s capital value, some charge a variable amount based on the amount of water used (volumetric charging), and many councils use a combination of these methods.
In Selwyn, properties on Council supplies pay a combination of a base rate (through a targeted water rate) and a variable amount based on the amount of water used (volumetric charge). Water meters help to reduce water consumption as they link water use to charging – so people who use more water pay more in charges, while properties with lower water use benefit from lower charges.
Water charges in Selwyn compare favourably with those in other parts of New Zealand – well below the average for medium- size councils. Our volumetric charge (currently 48c per m3) is one of the lowest in the country.
For more information on water meters and charging, see www.selwyn.govt.nz/watermetering
Your say: Let us know your views on the proposal to increase water charges to provide for quality improvement and water demand management. See the question on the online feedback form or submission form.