If the Dunedin City Council decides to keep faith with in-house delivery of water services, rather than setting up a company for the purpose, modelling suggests consumers are in for short-term disadvantage.
A graph produced by the council shows the gap almost closing by 2033-34.
Cr Jim O’Malley wished the data went past 2034.
He expected this might well show in-house delivery was less expensive for consumers after that, because an increased level of debt tied to a water company would come with interest bills.
Cr O’Malley said a misleading impression about the extent of water costs had been allowed to stand. The council had, in reality, undercharged for water services.
Running up deficits had added to council debt. Water operational costs were not being paid for in real time.
"I’ve been pushing that we need to be honest about the water bill and it should be about $2000 now."
This is predicted to more than double by the end of 2033-34.
Cr O’Malley said this was being driven by asset management plans for what was needed in Three Waters in the next nine years, so the basis for expenditure would be much the same in either scenario.
"Because, in the end, it’s still your piped infrastructure and your water plants that are costing the bill."
Cr Mandy Mayhem said more information was needed about what implications there might be from setting up a water company.
Cr Bill Acklin said establishing a company would enable a lot more borrowing.
However, he cautioned against this, as he viewed council debt limitations as being helpful for decision-making.
Cr Brent Weatherall said he felt it was wise to maintain a business-as-usual approach for a core council activity.
He, too, indicated lack of comfort with council deficits.
"There is no doubt council would have to address the sustainability of debt-funding our water services, which effectively subsidises water consumers’ rates."
