By Geoff Kreegher (Hamilton Ratepayer)

Water meters appear to be back on the agenda for Hamilton – Mayor Paula Southgate has described the mooted rate rises needed for water infrastructure as “the worst news for ratepayers in the last two decades”.
https://www.waikatotimes.co.nz/nz-news/350171086/water-meters-back-cards-hamilton-continued-rate-hikes-mooted-worst-news

Much has been made of a suggestion that water meters are under consideration by Council. The rhetoric strays from fact, particularly the cost of installation and identification of leaks, no mention of replacement timeframe (10-15 years) or replacement costs, some Councillors believe an element of inevitability.

Tauranga implemented universal water metering in the early 2000’s, around 39,000 of their fleet of 50,000 water meters have now been in service beyond the suggested life span. The installed value was approximately $9.8m for 39,000 meters, resulting in an approximate installed cost of $250 (remember it began in 1999) and are now in the process of replacing around 26,000 ageing residential water meters.

The predominant benefit of reduced water demands, resulting from universal water metering, was the deferment of water and waste-water infrastructure capital costs.

Although water metering introduced increased operating costs (meter reading, billing, water meter maintenance and renewal) these were offset by the reduction in the water and waste-water treatment costs which resulted.
https://www.waternz.org.nz/documents/other/101029_tauranga_on_metering.pdf

Meters are an essential component of the ‘reduce’ element. The only way that customers can effectively act to reduce their demand for water and to use it efficiently is by understanding how much water they are actually using.
https://www.wellingtonwater.co.nz/assets/Resources/Drinking-Water/20231208-WWL-Universal-Smart-Water-Meters-Info-Paper-for-HCC-Councillors.pdf?file-size=3.1+MB&file-type=pdf

This is not entirely true, it is not so much ‘understanding how much water they are actually using’ it is the actual water bill including the ‘back office’ function and administration cost of supplying the water.

Much is made of water meters identifying leaks, which is only partially true, they certainly identify leaks on the ratepayer’s property, usually by complaint or a marked increase in the charge for water, but they cannot identify leaks on the Council network and the advocates of water meters fail to mention this or differentiate the two.

Hamilton

The Waikato Times reported that Councillors were told that Hamilton’s “rate hikes” result from “the failed Three Waters proposals”, “demands for water funding”, and “requirements to balance Council books”., were behind the mooted rate hikes.

All previous excuses rate rises were to ‘balance the books’. Water was always part and parcel of that. The staff at Council and our elected representatives must have been asleep at the wheel to suggest the rate hikes are largely a result of the failed Three Waters proposals.

Prior to the election, National made it abundantly clear that they would repeal Three Waters, all polls leading up to the election clearly showed that the Labour Government would get a hiding. Councils should have prepared an alternative budget (Plan B) before the new Government told them explicitly to put water back in (reactive rather than proactive). Instead of bleating they should have been prepared, but now they have to speedily rework their finances as water service costs must fit back into their long-term budgets.
Councillors were also told installing water meters across the city would come with a $53 million bill.
Did they pluck this figure, out of the air?

A 2016 quote from a reputable plumbing company for a Standard Water Meter Installation was $678.38 per household. $678.38  x 62,849 (households that are serviced through the Drinking Water Reticulation Network =$42,635,505.  Costs have risen (50%) since 2016. So at $1017 per household, installation costs for the city would be $63,917,433.

And that price does not include…

  • Shut down of the street supply
  • Traffic management
  • Concrete cutting or reinstatement
  • Flushing and Chlorination
  • Insurance as required by HCC Contractor
  • Meter reading equipment (standard or Smart Meter)

A conservative estimate.

Recently, The Post reported that could costs $300 million to install smart water meters at residential properties in the Wellington region. That article says

“Installation is estimated to cost between $1500 and $2000 each”.

151,000 households x $2,000 = $302,000,000.

If using the median of Wellington’s costs for Hamilton, $1,800 per household x 62,849 properties, then the cost could be $113,128,200.
The current deficit and current debt together with the proposed rates rise over multiple years is not feasible or sustainable, it is fantasy land, literally la la land stuff.

Water Loss

Estimates of how much water is lost to leaks in Hamilton City varies from 14% to 16%.

The graph below shows monthly water use in Hamilton. It includes all water used in homes and businesses that use the Council’s water supply. Water use is measured in millions of litres.

Graph reproduced from Smart Water https://www.smartwater.org.nz/alert-levels/hamilton-city/

Water costs

Hamilton City Council charge water at $1.95 per m3 to those who already have water meters on city supply.

The Waikato Times quoted Hamilton’s Chief Executive Lance Vervoort saying “Around 30% of Council’s costs are related to water services,”

Hamilton’s current rate take is around $255.7 million (See Page 46 of the Annual Plan 2023-24)

30% of $255,700,000 =$76,710,000

However, the Annual Report of the previous year 2022-23 page 24 has water expenditure at $113.1 million (See Page 24 of the Annual Plan 2022-23)

Water supply $35.3million
Stormwater    $21.4 million
Wastewater    $56.4 million
Total              $113.1 million

A $36 million discrepancy needs some explanation.
Where were the savings made?

As noted in Tauranga’s case water metering introduced increased operating costs (meter reading, billing, water meter maintenance and renewal) these were offset by the reduction in the water and waste-water treatment costs which resulted.
Anecdotal evidence from a user perspective in Queensland particularly Hervey Bay showed that the standard charge (availability) was greater than the actual usage. Costs may be neutral or positive for the provider (Council) but costs will increase for the user.

Water services accounts for around 30% of Council’s costs. If water meters are introduced, will a corresponding reduction in the rate bill occur?

Currently water is funded by rates, the introduction of water meters to households means, all will pay including renters.

There is little doubt that water meters can reduce consumption but in the current situation of the city’s finances together with the astronomical cost, the continual replacement of water meters and the ability (inability) of ratepayers to fund this, it is a bridge too far.

 

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