We get the council decisions we deserve

Dr Eric Crampton
The Post
14 October, 2023

Democracy is the theory that the common people know what they want and deserve to get it good and hard.

At least according to the Sage of Baltimore, journalist and essayist H.L. Mencken.

Wellington has repeatedly chosen councils that have ignored the basic core services for which Council is responsible.

And so Wellingtonians will be getting it good and hard this summer if the taps run dry, and for years to come in paying for prior neglect.

Wellington Water, the water utility jointly owned by Wellington-area councils, warns that the pipes are aging more quickly than they can be fixed and that almost half of the network’s water leaks out.

None of it should come as a surprise. The warnings have been there for anyone who has cared to look or listen.

Water New Zealand produces annual reports on the state of water services.

Infrastructure runs down over time. If investment in renewals, or at least saving for future renewals, matches that depreciation, things should work out.

The 2011/12 report showed that the capital budget for water supply roughly matched depreciation, but capital expenditure on wastewater ran at about two-thirds of depreciation.

The 2015 National Performance Review showed capital expenditure on water supply was less than half the reported depreciation.

Capital expenditure can be lumpy, while depreciation runs in a straight line. Overs and unders should be expected. But persistent unders accumulate into a large problem.

The 2020 Mayoral Taskforce Report concluded that funding for renewing the water network “has consistently been significantly lower than the depreciation collected. Significant funding has been directed to other projects.”

Apologists for the current mess blame ratepayers for opposing necessary rate increases.

In that view, ratepayer stinginess forced the Council to ignore the pipes and prioritise $180 million for a convention centre, $200 million for the central library, $180 million for Town Hall and possibly another $150 million before strengthening is finished. And a flash swimming pool upgrade for Khandallah when Johnsonville’s pool is 3 kilometres away.

Council may yet also fund strengthening for the Michael Fowler Centre and the Opera House, so we might have four different venues in a city of 213,100 people with collapsing pipes.

The most recent Water NZ performance review notes that Wellington Water has had the largest increase in capital expenditure.

But overcoming years of neglect will take time.

Councillors have noted that expanding the water upgrade and renewals programme in any kind of hurry would be difficult. Finding staff to do the work may be impossible in the short term.

But inability to quickly scale up water works today does not create room to fund other works. If your roof had giant gaping holes and no builder was available until next year, buying a car with the money you couldn’t yet spend on the roof would not make much sense.

The same ratepayer base covers the cost of all of it. And work not done on the pipes today because it can’t be scaled up quickly means more costly work later.

Barring a bailout through Three Waters Reform that would have others cover the cost of years of council irresponsibility, Wellington’s ratepayers should expect a long slog ahead.

That slog will require Wellington’s ratepayers to be far more vigilant. They will have to pay to fix the water network while paying for every other project.

Perhaps it is time for a quid pro quo. Ratepayers’ reluctance to support even higher rates may come down to an expectation that their elected councillors will spend the money foolishly.

And so, a potential deal. Or at least the outline of one.

Council should not proceed with any substantial projects until it can provide ratepayers with a credible assessment of the bills they will each be facing to fix the water network.

Once ratepayers know what the rate burden for core infrastructure will look like, put any substantial additional project to a ballot of affected ratepayers. Council borrowing is ultimately guaranteed by the Council’s ability to set whatever rates are needed to cover its debts, and auction properties that cannot pay. Ratepayers bear that risk rather than residents more generally.

The ballot would detail the project cost, the contingency against cost overruns, the expected project benefits, the special levy required of each property to cover the cost and the period over which that levy would run.

Good projects add value to a city. That value winds up being reflected in land prices. Ratepayers should be happy to endorse projects that provide value more than their cost, or to endorse the wrecking ball for buildings whose strengthening simply is not worth it.

It would also make it harder for ratepayers to blame anyone else for poor choices.

We get the council outcomes we deserve. Let’s hope we deserve better ones in the years ahead.

To view the article on The Post website, click here.



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