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AUCKLAND REGION WATER REVIEW

Option 4 The People's Option

Structure

One regional bulk supplier (referred to as ‘Watercare’) and the six Council’s water services.

Ownership

Infrastructure (pipes and plant) and management of the operations of the six Councils’ water services would be in the common ownership of the residents and ratepayers/tangata whenua and vested by them in their elected Councils.

The regional bulk supplier (‘Watercare'), disestablished as a Local Authority Trading Enterprise (LATE), would be a non-commercial body, run as an essential public service, in the common ownership of the residents and ratepayers/tangata whenua of the region, vested by them in a governing body of their elected and kaitiaki tangata whenua (local hapu with guardianship responsibility) representatives.

Governance

Services currently provided by the Council departments would remain as Council departments or would be transferred to Stand Alone Business Units (SABUs), and franchising and corporatisation would be forbidden.

Services currently provided by SABUs would remain SABUs or would be transferred to Council departments, and franchising and corporatisation would be forbidden.

Existing LATEs, ie Metrowater Ltd, would be disestablished and returned to Council control as either a water department or SABU, and re-establishment of water LATEs forbidden.

Existing franchises, ie United Water in Papakura, would be ended after an adequate notice period; the operations would return to Council ownership and control as departments or SABUs, and franchising forbidden.

SABUs would be governed by a Board of Councillors, plus outside persons with specialist skills appointed by the Council, and by new community representatives, comprising kaitiaki representatives and others elected by residents and ratepayers, all with decision making powers.

 The Board and experts to be accountable to the Council, the elected/kaitiaki representatives to remain accountable to the community.

Social, environmental and service objectives would be set by the elected Councillors, by negotiation with the full SABU governing group as above.

‘Watercare' would have a controlling governing body directly elected by the residents and ratepayers of the six Council areas along with substantial representation of kaitiaki tangata whenua with all the powers of other elected representatives.

User pays water/wastewater/stormwater services, franchising and corporatisation, and establishment of LATEs would no longer be permitted.

Substantial kaitiaki representation/resident-&-ratepayer-elected representation in Council water departments’ decision-making, as in SABUs above, as of right.

Councils to poll their citizens for a decision on cessation of contracting out of water services, because it results in diminution of the public service ethos, and of staff working conditions and safety, and in the interests of the community losing out to the interests of the private shareholders of the contractor businesses.

Regulation

Establishment of an independent body (the Regulator), funded by the six Councils and/or central government and accountable to residents/ratepayers/tangata whenua, which designs and operates an information disclosure regime covering compliance with kaitiaki principles, conservation, environmental standards, health, working conditions and safety, water quality,leakage levels, reliability, costs, customer service levels, long-term planning and prices.

On account of the high level of co-operation and collaboration needed between the (six Councils / ’Watercare’) suppliers, water services would need to be exempted from the Commerce Act.

No more commercial secrecy: Council water departments or SABUs and ‘Watercare' meetings and agendas completely open to the public.

To guarantee water services receive due importance in allocation of Council funds, SABUs and Council water departments would have kaitiaki representatives, and elected representatives (other than Councillors), in a decision making role.

These representatives to have at least a twice-yearly obligation to report back to ratepayers and residents/tangata whenua for endorsement, in accessible public discussion meetings.

No restrictions or disconnections of water supply would be allowed (as has been legislated in the UK under the Water Act 1999)

Disclosure of financial statements and performance measures would be publicly available information.

Target service levels would be set by the Councillors by negotiation with both their (SABU/water department) Boards etc and the community’s water representatives.

 

Operations

A Code of Conduct, after consultation with the public, would be written by the independent regulatory body.

The Code of Conduct would define the obligations of the regional bulk supplier and the individual Council water services to each other and to their residents/ratepayers/tangata whenua.

The Code of Conduct would define the obligations of all parties to exchange information and ensure improved democratic processes to achieve community/tangata whenua input into the infrastructure investment decision processes.

The Code of Conduct would define the minimum standards of the Council water services dispute resolution procedures.

Promotion of conservation will be integrated into the operational objectives. Greater conservation will diminish demand growth and offset demand drivers like population growth.

Unlike the corporatised governance structures of the three official ‘options’,in which the business model contains a link between consumption and profits, the non-commercial People’s Option does not suffer from the inescapable incompatibility with conservation that arises when a per cubic metre charging regime affects revenues and therefore profits.

The fulfilment of those conservation objectives stated in the operational objectives of the Council water services will be strengthened through having a complement of conservation staff.

Those conservation staff, whose brief will include encouraging community participation, will be more effective when working within a co-operative environment than within a competitive environment, in regard to both public and Council to Council relationships.

Pricing and Funding

• Water, wastewater, & stormwater services would be funded by general rates based on property value/annual rental value, without resort to user pays or flat charges of any kind, and with no regional goods and services, or poll tax charges.
• Schools, churches etc which are not liable for rates would not be liable for special water/wastewater rates.
• Funding for water services would be determined by Councils, elected/kaitiaki SABU/ or water department representatives, and the `Watercare' governing body kaitiaki/elected representatives, with genuine regard for the views of residents, ratepayers and tangata whenua.
• Infrastructure Auckland powers would be extended to include the funding of water and wastewater projects.
• With water services acknowledged as a public good under the People’s Option, promotion of Council projects incorporating household-funding assistance for widespread conservation improvements would become possible.

Outcome 1.   Safety, Security and Reliability

• The People’s Option, by removing and banning the provision of water services according to any corporatised, commercialised or privatised business model, not only removes the possibility of commercial failure, but also safeguards the interests of the community in their water services reliably remaining an essential public service, a public good.
• Standards to be developed by the independent regulator and made available for community comment and suggestions. Once approved, publication and circulation of the agreed standards would take place.
• The independent regulator has responsibility for monitoring, auditing and reporting performance, which reinforces accountability towards standards.
•  In addition the regulator has the power to force disclosure in accordance with the Code of Conduct and the elimination of commercial secrecy under the disclosure regime encourages industry co-ordination and benchmarking.
• Compliance with the requirements can be enforced by performance reports to the Councillors and water representatives on the performance of their own water service operation and ‘Watercare's’ performance.
• Accountability to the community can be achieved in part through publication in the Council annual report of comparisons between targets and outcomes.
• The People’s Option introduces new measures for accountability to the community by inclusion of the community’s own representatives, with decision making powers, at both regional bulk and Council supplier levels.
•  Those representatives are answerable to residents and ratepayers and tangata whenua and are required to seek endorsement from the community, at least twice yearly, in accessible public discussion meetings.
• The People's Option (Option 4) achieves safety, security and reliability by requiring accountability and compliance with standards, by public disclosure of performance, by new mechanisms for community decision making and oversight, and by the role of the regulator with powers for enforcement in the community’s interests, all within a guaranteed non-commercial framework.

• The People’s Option will integrate promotion of conservation into the operational objectives.
• Removal of the business model/commercial incentives, removal of link between consumption (costing of water per cubic metre) and profits, will greatly enhance the fulfillment of these objectives.
• Greater conservation will diminish demand growth and offset demand drivers like population growth, as in Christchurch city, where with rates-funded water, a 10-year record of conservation  success during population growth has seen household meters used only for conservation measurement, and a Council water department able to keep rates charges low.
• These operational objectives will be strengthened through having a complement of
• conservation staff, who will be much more effective in the new co-operative environment, in regard to both community and Council to Council relationships.
• Community education and participation, guided by conservation staff, can be given greatly improved priority, as soon as the success achievable by these means is no longer a threat to the revenues and viabliity of water services.
• Conservation methods and projects which become possible when water services are
• acknowledged as a public good, could range from Council projects for improvements incorporating household-funding assistance, to consideration of small-scale or local solutions: hi-tech or low-tech.
• Environmental standards will be governed by a combination of the Resource Management Act resource consents, while monitoring of the Councils and the disclosure requirements will be enforced by the independent regulator in accordance with the Code of Conduct.
• The public consultation process performed by the regulator in producing the Code of Conduct will be more transparent than if it is performed by the management of the services suppliers and the consultation will engender less distrust by the public when self-interest of the management is removed.
• Similarly, the process within each Council and in ‘Watercare’, for decisions on provision of water services, will be much more accessible to the community, via the new representatives and their direct accountability back to the community.
• The People's Option (Option 4) achieves harmony with environmental sympathies and wishes of the community and is more closely aligned with the community’s values.

 

• It is the practice in the UK under their Water Act 1999 that there are no restrictions or disconnections. By implementing this in the Auckland region, the availability of potable water would be recognised as an essential service which must be available to all
• The fallacy that householders freely negotiate a contract with their supplier would disappear.
• The People’s Option aim to have water acknowledged as an essential public service and a public good, instead of a commodity for purchase - if you can afford it - will ensure that all households have access to the best quality water according to their needs.
• Commercial users may choose to use lesser grades of water for activities such as vehicle washing.
•  For household purposes, only one water quality (drinking quality) is acceptable for supply through the household pipes.
• The People's Option (Option 4) monitors the quality of freshwater supplied through the pipes and regards access to potable water as a basic human right which will not be disconnected.
• The independent regulator’s role would give the community unprecedented access to water quality analysis and to ongoing monitoring of water services, information at present difficult to access because of its commercial sensitivity.

Outcome 4.   Regional strategies for growth

• The infrastructure would at all times have a minimum capacity to meet the one in two hundred year standard.
•  Long lead times in infrastructure developments necessitate planning which is better served by the service model rather than the corporate model.
•  Demand for growth in network capacity can be mitigated by conservation efforts. An active public awareness campaign promoting conservation has proved highly effective in the past in reducing per capita consumption without the use of punitive user charges.
•  The People's Option (Option 4) provides a regulatory minimum for planning, enforced by the regulator and the Councils.
•  Council's conservation officials can instigate a large-scale community education campaign on the benefits of conservation without coming into conflict with those whose interests lie in increased revenues.
• The planning and organisation needed can best be managed by means of co-ordination throughout the region in a climate that is not hindered by a fear of giving away ‘commercially sensitive’ information.
•  The role of the regulator is that of an overseer to ensure that the planning and co-ordination is taking place.

• Openness and transparency which are unhindered by considerations of commercial secrecy would allow the residents and businesses of the region to make informed representations to their elected representatives about their fears of infrastructure failure such as they have experienced with water in 1994 and with electricity in 1998.
• The People’s Option gives long term sustainability by protection of water services from the distortions of the market and from volatile changes in private ownership or its fortunes, by guaranteed longterm non-commercial community ownership as an essential public service.

• The People's Option (Option 4) places a higher importance on the ‘ability to pay’
• principle than on the ‘user pays’ principle.
•  In recognition that clean water and a sanitation system are essential to individual and public health, and to the health of the environment, the Commerce Act would be amended to exclude water and wastewater services in the same way as public health has recently been removed from the coverage in the Commerce Act.

• Because the People's Option has kaitiaki representation which is not proposed in the three Auckland Water Steering Group options, conformity with existing Iwi resource management statements with regard to water is enhanced by the representation of tangata whenua on the governing bodies.
• Incorporate the principles of "kaitiakitanga" (guardianship) into the activities of the Council water services.
• Part of the role of the regulator would be to express an opinion on whether the water suppliers have complied with generally accepted kaitiakitanga principles.
• The People's Option (Option 4) provides a role for tangata whenua where the relationship is one of partnership and not merely of ‘requirement to consult’.

• The People’s Option guarantee of public ownership is vital because water is an essential service and also a natural monopoly.
• The community would vigorously oppose any further sales of public assets.
• Privatising, franchising (essentially privatisation in all but name), and contracting out of the core operations whilst retaining public ownership of the pipes themselves, result in accountability to private shareholders taking precedence over the interests of the community.
• Corporatisation brings Companies Act requirements that were designed for a completely different competitive environment and are inappropriate for the supply of water, wastewater and stormwater which are a public good.
• Public ownership and the public service ethos of employees working for territorial local authorities has a less mercenary set of values, and the wider public good is better served by the recognition of the divergent interests of the entire community as opposed to just one ‘stakeholder’.
• Accountability through the electoral system is the best system for reconciling those divergent interests.  Of all the options, only the People's Option (Option 4) promotes the electoral system.

• The People's Option insists on local government having a responsibility for the wellbeing of its citizens and will not pass the buck to central government.
• On the other hand, central government has the corresponding duty toward the welfare of its citizens and therefore must maintain a legislative framework that enables local government to fulfil its obligations to the local community, and does not allow it to relinquish those obligations.
• The People’s Option ameliorates social impacts by removing a root cause of social and economic distress, which was punitive user charges.
•  Residential tenants will be freed from water charges and threatened imposition of wastewater charges when user charges return to rates.
•  User charges will cease to be the source of capital revenue for infrastructure expansion for future needs, so minimising costs for those in the community who while least able to pay are paying the most.
•  The People's Option (Option 4) satisfies the widely expressed desires of the people of the region as seen repeatedly in draft annual plan submissions, and answers widely expressed community dissatisfaction.
• Social discontent, most visibly in Waitakere, Papakura and Auckland City in the last four years over water charging, demands a response which is not to be found in the 3 official ‘options’.

•  No company tax is payable.
•  Legal infighting among local bodies should be minimised by abolition of the commercial model.
•  Intervention of the independent regulator should also drastically reduce recourse to the courts.
• Marketing expenditure and branding exercises would be unnecessary.
• Reduced duplication of records and billing.
• Meter reading costs are cut out.
• The People's Option (Option 4) aims to minimise the costs for those households that are least able to afford charges for one of the necessities of life.
• Merry-go-round charging like the $1 million annually given by Auckland City Council to Metrowater for fire fighting water, would be saved, and the Council would provide that water at its true value, under the People’s Option.
• Profits, under the commercial and privatised (franchise) models, will cease along with the companies, in favour of sustainable services at cost.

 
The People's Option was developed for the Auckland Region Water Review, as Option 4 - the People's Option.
It has been prepared on a consensus basis by a coalition of the following groups together with individual citizens from other local body areas:

Citizens Against Privatisation - Waitakere City  -  Ph 09 836 6389
 Fax 09 838 2389
capwaitakere@free.net.nz
 http://homepages.go.com/~capwaitakere/index.html

Papakura Water Pressure Group  -   Ph/Fax  09 298 6548
www.papakurawaterpressuregroup.pl.net

The Water Pressure Group - Auckland City  - Ph 09 828 4517 or 846 9825
 greenleaf@pl.net
 http://www.water-pressure-group.org.nz/

North Shore City contact    Percy Allison
Ph/Fax 09 443 0369

Manukau City      Bob Kay
09 267 8917
025 277 8837
 


 

Prepared by The People's Option Water Coalition Auckland Region New Zealand February 2001

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