Much more expenditure looms to get Dunedin’s water infrastructure in strong shape and the city council is keen to get on with it.
The Dunedin City Council decided yesterday to bring forward $35.2 million of capital spending to enhance the resilience of treatment plants and to replace more pipes.
The market had the capacity to deliver this, councillors were told.
However, approval of the council’s expanded programme is subject to securing confirmation from the Department of Internal Affairs that associated debt will be taken off the council’s books.
This year’s general election also brings uncertainty, because the National Party has pledged to scrap the Government’s Three Waters reform model. Should National get its way, water assets and debt would stay with the council.
When the council adopted its 2021-31 long-term plan, it expected the capital programme for 2023-24 to be about $145 million.
It is now shaping to be $212.5 million and the Three Waters component could be $95 million.
Crs Lee Vandervis, Carmen Houlahan and Cherry Lucas voted against the accelerated spending, but the rest of the council voted for it.
Cr Jim O’Malley led the case for pursuing the accelerated programme, arguing it was an "extra spend due to extra delivery, as opposed to cost overruns".
It was an extension of the council’s tactical approach of making assets as strong as possible in case responsibility passed to a new regional water entity, known as Entity J.
The aim was "not to gold-plate the system — it’s bringing up to standard", Cr O’Malley said.
An alternative option of capital spending of about $60 million on Three Waters in 2023-24, rather than $95 million, was also higher than the council had signalled in the 2021-31 plan.
It would also have enhanced resilience of the system to some extent.
At one point, Cr Vandervis came close to walking out of the meeting after his characterisation of overspending was challenged.
Cr O’Malley raised a point of order about this and Dunedin Mayor Jules Radich seemed to agree overspend was not accurate when the discussion was about determining future spending.
In the end, Cr Vandervis was allowed to run with "a proposed future overspend".
Cr Lucas was uncomfortable about the level of debt the council was looking to carry.
"Now’s not the time to be adding more debt to our programme," she said.
Cr Houlahan said there was too much uncertainty for her to vote for the higher spending.
Cr Andrew Whiley said he wanted surety the city would have the right infrastructure forits needs.
Delivering more capital work now would place the city in good shape for the future, he said.
Deputy mayor Sophie Barker encouraged the council to "get the work done while we’re still in control of it".
One of the biggest risks was another entity would take over decision-making and the council would then have limited ability to influence work getting done, she said.
The spending would reduce the risk of network failure and the risk of contractor capacity moving away from Dunedin, she said.
Cr Christine Garey noted reacting to emergency situations was significantly more expensive than having resilient systems in the first place.
"Residents have told us over many years to improve infrastructure in the city," she said.
"We need to prioritise this, because we don’t know if Entity J will prioritise it."
Cr Brent Weatherall was nervous about spending borrowed money, but was persuaded by Cr O’Malley’s argument.
"I sincerely hope you’re right."
