Watercare fee increase

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mattwnz

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#1564303 2-Jun-2016 14:32

chimera:
darylblake:

This is what comes with building.

Yes absolutely the council and watercare are extremely poorly run organisations, where the people working there are either monkeys or trying to justify their existance. There is soo much waste going on, its even starting to upset local government now as they are not budging on the unitary plan. And I have absolutely no doubt that behind immigration, this problem is absolutely a massive contributing factor to the current housing crisis. Its probably on par with all the interest rate cuts we have had. Anyone who doesn't deal with the council wont see it in that light but the numbers don't lie. We need to build 13,000 houses a year in auckland just to keep up with the demand. And our council is only pushing through about 9000. So we have a deficit of 4000 per year. My building company also said that they are sending a lot of building consents and section 92's ( sub divisions ) to be approved to a team in wellington because they are so overloaded.

I know this because I am in the process of building a second property and I am feeling it too.

Last project i built in 2013/2014 was about a $25K development contribution. (WHICH THEY ARE NOT USING TO UPGRADE STORMWATER) they are spending it on parks and reserves.

In the current project they are making me pay for manholes to be put in because their stormwater management is so poor, so they can have access to the stormwater line, I am paying for water retention/detention tanks on top of that. I dont even have a clue as to what the other council imposed costs are going to be yet, and some of the inspectors are really over the top strict and others are loose units, there is absolutely no consistency.

Im on my second project now, but one thing I have learned is just to suck it up and pay the costs and get it done asap, otherwise the costs will just go up.

TLDR: Council has too many cheifs and not enough indians.

Also sounds like my last project. I had a house with cross lease section on the rear, but because the section had been cross leased in July 1988 but the district rules had changed in January 1988, we had to go through a massive resource consent process, getting land use consent and finally shift to a subdivision. We had overkill on engineering for stormwater, massive contribution costs (even paying for a manhole at the top of our section, because the stormwater grates off the road went into a 5m pipe and emptied onto our land - WE had to pay to direct it to an open drain) We had to pay for vector to run power from over the road, water IGC costs, it was $70k over budget and thats with over-estimated budget costs in the first place. Because it took 2 years to complete, it blew out our holding costs. Here's a basic run down:

$7,000 engineering

$2,000 legal costs

$14,500 surveying / planning

$11,000 resource and building consents

$10,000 vector power cable

$18,000 watercare IGC charges

$26,000 stormwater manholes, detention tanks, dispersal bars (massively over engineered)

$28,000 holding costs

Then of course on top of that there were building costs, insurance, draughtsman, electrical/water/phone to house, excavations, $10k concrete driveway, landscaping etc etc...

Ridiculous. And they wonder why they have a housing shortage in Auckland.

The problem is we have a National led govt with a Labour led council (in terms of how they each want to run the country)

Not to turn this into a political debate, but IMO the Helen Clarke govt over a decade ago managed to get the unemployment rate "lower" by simply creating 30,000+ bureaucratic council related jobs over the period they were in power. As you say, too many Chiefs and not enough Indians - there are far too many paper pushing dick swingers who create procedure and policy for us all to abide by, rather than putting those people in the jobs that need the most attention. This turned councils from a public service into a highly profitable business. They should have spent more money on expanding infrastructure to sort motorways, parks, opened up more land for residential etc and employed people in THOSE jobs rather than Council desk jockeys.

They look very high compared to my local council. You would think a big council would be cheaper due to economies of scale. But I suspect they charge them becuase they can, and have a lot of debt. and are essentially a monopoly. Eg. You can't go to another council instead. The thing is that they know you will be making a profit on the land when you sell As Auckland prices are so high, so it is the buyer of the subdivided land that ends up paying in the land price.. I was shocked that they charge for initial meetings for developing land. My local council will do all that for free.

chimera

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#1564308 2-Jun-2016 14:38

Yes, there are development contribution fees and yes these are paid by the developer in new subdivisions. However if the section is old enough that the development contribution fee was not paid (I guess before this came in) then there is an infrastructure growth charge instead. Likewise, if there is a home and minor unit built, then if dev contr fees have been paid already, there is IGC due for the minor unit (supposedly because more "strain" on the infrastructure) If the minor unit is under 65sqm then the cost is 2/3rds of the IGC.

Of course, if I build a 3 bedroom home with a 2 bedroom minor unit and dev contr fees have already been paid, then (in Snells for example) I'm up for $18k IGC for the minor unit (2/3rds of the $27k IGC). But of course, if I built a single dwelling with 5 bedrooms and 2 kitchens and 3 bathrooms, I don't need to pay cent more. Counter intuitive really.

Again, I don't disagree with an IGC cost. I disagree with an excessive IGC cost that is going up in price yet AGAIN.

Aredwood

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#1564570 2-Jun-2016 20:47

Linuxluver:

I have no problems with the Council or Watercare. If people want to live in stand-alone dwellings in a far-flung suburbs they MUST understand this is the most expensive infrastructure possible - lots of it to serve a small population. They'll be moaning about their rates next.....all self-inflicted. Enjoy the beach. :-)

The unitary plan will allow greater density and more efficient use of existing infrastructure, effectively making it cheaper per household over time.....especially for people in apartment buildings and townhouses. I guess you could save money by using only roof water and installing a septic tank.....but then you're up for a huge bill there, too.....plus ongoing costs and maintenance...and times when you have to buy water because it doesn't rain.

There is a clause in the building code that says, if a council sewage system is available you must connect to it. So you can't get a septic tank instead. And if you are connected to the sewage system, but not the water network (have rainwater tanks instead) You will have to pay $627 per year. As a fixed sewage charge. So you have lower ongoing costs if you do connect to the water network. But keep your usage low.

Yet another case of the super city raising prices but providing lower services. Under the former North Shore City council. Water was about $1.30 per m3, Billed 1/2 yearly, with a min charge of $15. Sewage was a $160 per year fixed charge added to the rates bill. Under the supercity, Water is now $3.37 per m3 (including the volumetric sewage charge), and the fixed fee is now $205 per year. And the north shore city council still had a well maintained sewage and water system. Just look at the number of sewage overflows due to storms. Virtually none in the former North shore area. Lots in the former Auckland city council area.

Also the north shore city council only read the meters and sent out water bills every 6 months. So that saved alot of money compared to watercare reading meters 2 monthly and billing monthly.

mattwnz

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#1564634 2-Jun-2016 22:21

chimera: Yes, there are development contribution fees and yes these are paid by the developer in new subdivisions. However if the section is old enough that the development contribution fee was not paid (I guess before this came in) then there is an infrastructure growth charge instead. Likewise, if there is a home and minor unit built, then if dev contr fees have been paid already, there is IGC due for the minor unit (supposedly because more "strain" on the infrastructure) If the minor unit is under 65sqm then the cost is 2/3rds of the IGC.

Of course, if I build a 3 bedroom home with a 2 bedroom minor unit and dev contr fees have already been paid, then (in Snells for example) I'm up for $18k IGC for the minor unit (2/3rds of the $27k IGC). But of course, if I built a single dwelling with 5 bedrooms and 2 kitchens and 3 bathrooms, I don't need to pay cent more. Counter intuitive really.

Again, I don't disagree with an IGC cost. I disagree with an excessive IGC cost that is going up in price yet AGAIN.

As they are a monopoly, they can do what they want. But certainly those fees are significantly more than in my area in the Wellington regions. But then again land is significantly cheaper too. If they were charging those sorts of fees, then land prices would have to go up significantly. You would think the government would be looking into this, considering they are wanting cheaper houses in Auckland, and a big part of the price on a new dwelling will be these infrastructure costs. There is a council election coming up, time to get in some new blood

chimera

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#1564648 2-Jun-2016 22:54

^^ Bingo. Effectively a Monopoly. They state they are non-profit and pay no dividend back to the Auckland council (who own 100% shares in them) Check Watercare end of year financial statements you will see their top Directors getting salaries of around $100k... sounds reasonable for a big business, until you check the bonus payouts. The payouts are in the $$$ millions of dollars. Way to hide the Chiefs real income and where a portion of tax payers money really goes.

Yes land more expensive vendor asking $400k for about 700 sqm. Very little under this price. The going rate for Auckland - and bear in mind this is on the very fringes of Auckland - considerably higher closer to CBD (if you can find any spare piece of dirt closer that is)

Jase2985

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#1564685 3-Jun-2016 05:56

there is a section new me. 152sqm for $315k

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driller2000

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#1564718 3-Jun-2016 07:57

I have worked infrastructure for close on 25 years incl local govt, construction and consultancy - and it costs a truck load to supply all the services we need - so a couple of points:

1. WSL's Cost Increase

Is a pittance @ 2.5% - and equates to $1.75 per month per household.

http://www.watercare.co.nz/about-watercare/news/Pages/Water-and-wastewater-price-changes-effective-1-July-2016.aspx

2. Infrastructure and Development Contributions:

These charges are based on actual costs incurred to provide infrastructure - roads, sw, water, ww, parks, libraries etc - and again it ain't cheap.

http://www.aucklandcouncil.govt.nz/EN/ratesbuildingproperty/ratesvaluations/billingpayment/Pages/howyourratesarespent.aspx

3. Rates - Akl cf. Others:

Akl is cheaper than many other NZ cities. Unfortunately I couldn't find the link I was looking for - but I believe their was thread that discussed this exact matter a few months back?

Here is an older link: http://www.stuff.co.nz/national/10140703/Which-place-has-the-highest-rates

However getting a direct comparison can be tricky as each council also have additional costs that should be included.

Smaller more dispersed councils often have higher costs as their inf costs are often skewed by having lots of roads to build/maintain, dispersed communities and a smaller population base to fund them.

As a %age of capital value AKL is also lower - but that raises a whole other issue which I won't touch here : )

4. Expensive Overpaid Bureaucrats?

Not really - well mostly not.....the vast majority are highly experienced - degree qualified people responsible for massive budgets, complex projects and issues - and management of significant risks. They get paid what the market pays as AC/WSL/AT compete with private industry for these same skilled people.

We could get low skilled/low paid people running these organizations - but as multi $BN businesses it would ultimately cost us a lot more to fix up their bad decisions.

5. Septic Tanks / WW Charges :

Septic tank systems have no place in built up environments as they invariably lead to pollution of waterways and it is far cheaper (and better for the environment) for a community based system.

Edited: To reduce sounding like a know-it-all!! :)

Aredwood

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#1565931 5-Jun-2016 02:39

Some of the problem is the Auckland council having stupid rules around infrastructure. One of my neighbours wants to build a minor dwelling on the back of his property which borders mine. I don't have any objection with the dwelling itself. But because his section slopes away from the road. He can't run the stomwater from the new dwelling to the road. So he wants me to give permission to him to run it through my land, and through the land of another neighbour to a stomwater pipe on the other neighbours land. I will not be agreeing to that, as it will mean an easement will be added to my title. And lots of digging. The new pipe won't be any use to me for stomwater drainage on my own property as it would be on the highest part of my land.

All of this because the council planning department that looks after the north shore won't allow stomwater pumps to be used. If the property was in the former Auckland city area, a stomwater pump would probably be OK. (Yes that's right - planning policies are still different depending on where you live). But if he had needed a sewage pump that would be OK. (Why do the council think that a possible stomwater overflow is worse than a sewage overflow?)

driller2000

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#1565945 5-Jun-2016 08:16

Aredwood:

Some of the problem is the Auckland council having stupid rules around infrastructure. One of my neighbours wants to build a minor dwelling on the back of his property which borders mine. I don't have any objection with the dwelling itself. But because his section slopes away from the road. He can't run the stomwater from the new dwelling to the road. So he wants me to give permission to him to run it through my land, and through the land of another neighbour to a stomwater pipe on the other neighbours land. I will not be agreeing to that, as it will mean an easement will be added to my title. And lots of digging. The new pipe won't be any use to me for stomwater drainage on my own property as it would be on the highest part of my land.

All of this because the council planning department that looks after the north shore won't allow stomwater pumps to be used. If the property was in the former Auckland city area, a stomwater pump would probably be OK. (Yes that's right - planning policies are still different depending on where you live). But if he had needed a sewage pump that would be OK. (Why do the council think that a possible stomwater overflow is worse than a sewage overflow?)

Obviously I don't know the details - but a couple of comments / thoughts:

Assess what they ask for carefully - for while works on your property will probably go OK (it will be a disruption even if they do) - however they can go wrong and be a right damn pain to rectify.
Ask if there are any alternate routes that don't go through your place.
Ask how they intend to build the line - if its deep it may be preferable to drill it rather than open cut - which would be a lot less disruptive.
I would not let them build anywhere near my home if I was you - and definitely not under it ie. additional risk - short and long term.
Pumps are a pain - they inevitably aren't maintained - they can fail - eg. power cut during a storm - which is when you most need it to run - and they have ongoing O&M costs. You would always choose gravity over a pump if gravity will work.
I would be surprised if council put an easement in place - they generally don't use them as they don't need them to get future access to public SW for maintenance purposes - and an easement costs council cash - both in legal costs and also $$$ your way as you would be sacrificing some legal rights to said land. They generally only do it for significant assets. But as I said I don't know the details.
And finally while it is the neighborly thing to do in terms of allowing such works to happen ie. to benefit each other (and you would appreciate it if your roles were swapped) - but proceed with caution. FYI - if they HAVE to, they can force the works through via either the LGA or Public Works Act (incl possible Hearings) - but that just costs everybody more grief - but again that's up to you. The key thing is to make sure all alternates are considered - the best route (lowest risk) is chosen - that the least disruptive construction method is selected - that a good contractor is awarded the job and managed appropriately (ie. in and out - no fuss no muss) and that reinstatement agreements are in place before you sign anything ie. generally like for like.

So yeah I would suggest the rules aren't stupid per se - they have a basis - it's just a pain when the proposed works affect you, but are of no direct benefit to you.

Cheers and good luck.

chimera

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#1565956 5-Jun-2016 08:43

^^ some responses about the above...

Only 2.5% increase. That's correct, but go and research how many "only 2.5%" increases they have done over the past 10 years or so that I can recall. Combine that to the fact that when water rates were split from the council and managed by Watercare, there was the "big sell" that your rates bill was no cheaper. Now, add the number of % increases on your ARC rates bill AND your water rates bill and the average "total rates" increase is HUGE.

Regarding easements in the post above, that is utter rubbish. Councils still allow easements if there is a need for them. There is zero cost to the council for this - it is ALL user pays these days, planner costs, surveyor costs, LINZ / title costs etc it is no skin off councils nose because the end user pays the bill. The only property related service that I know of that the council provides for free is an initial ~30 minute consult with a town planner to get a rough idea of what you want to do. Post that they charge generally around $150 per hour for pre planning meetings.

BarTender

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#1565963 5-Jun-2016 09:14

Cry me a river when your house and land increases by more than double the average wage per annum.
Infrastructure costs money. Either you pay for it or everyone via government taxes pay for it.
I hear there is a local body election shortly. If you think yoy can do better then why not run with your own views and proposed budget how to make it work.
Plus include how the unitary plan is going to fly.

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driller2000

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#1565965 5-Jun-2016 09:27

chimera: ^^ some responses about the above...

Only 2.5% increase. That's correct, but go and research how many "only 2.5%" increases they have done over the past 10 years or so that I can recall. Combine that to the fact that when water rates were split from the council and managed by Watercare, there was the "big sell" that your rates bill was no cheaper. Now, add the number of % increases on your ARC rates bill AND your water rates bill and the average "total rates" increase is HUGE.

Regarding easements in the post above, that is utter rubbish. Councils still allow easements if there is a need for them. There is zero cost to the council for this - it is ALL user pays these days, planner costs, surveyor costs, LINZ / title costs etc it is no skin off councils nose because the end user pays the bill. The only property related service that I know of that the council provides for free is an initial ~30 minute consult with a town planner to get a rough idea of what you want to do. Post that they charge generally around $150 per hour for pre planning meetings.

WSL - Wow so much heat for the equivalent of 6 cups of coffee per year....ok whatever floats your boat....

Easements being rubbish?...My team have approximately 30 SW projects for AC active right now - and only 1 has an easement planned. I said they are not usually required and I stand by that - based on real life - current project exp. So yeah I'm gonna make a call here - I know a bit more about this stuff then you do.

As for charges - yep time costs money - you don't work for free do you? Neither do the planers, engineers etc employed by AC.

Suggest you calm down and enjoy what is looking like a great weekend in a great city...imho :)

chimera

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#1566296 6-Jun-2016 10:17

I said your easement argument that it costs councils cash and is generally only used for significant assets is rubbish. Of course an easement is used as an absolute last resort, but if it's needed it's not that big a hassle so long as the t's are crossed and i's dotted. The last development I did my planner had to put an easement in for SW and septic under a driveway, went through easy as, in fact it wasn't even questioned it was assumed as there was no alternative. Its not a council cost, it's a user cost (which is fine)

Cry me a river when your house and land increases by more than double the average wage per annum. Infrastructure costs money. Either you pay for it or everyone via government taxes pay for it.

You completely contradict yourself. How do you think rates are paid? Obviously out of your wages. And how do you think your rates are charged? Based on house and land value. It's becoming more and more disproportionate. And back to water rates, there is a fixed portion of your bill that goes towards maintenance already - fine. Developers pay a contribution fee at the time they develop a subdivision - fine.

Let me give you an example of why I think IGC is a tax as this happened to me several years ago. If you have a section sitting amongst houses in a well developed street that is years old and been sitting there for years, it has no development contribution fee paid so is liable for an IGC charge. Now when that subdivision was created way back in the day, how do you think the water and sewerage pipes in that street were built? To cover all the houses except the section which they preempted wouldn't be built on? Of course not, it would have been spec'd to cover the worst case household water and waste use for all properties in the street. So why an IGC charge now? The house is built on that section, the home owner starts paying water rates which includes a fixed portion (the same as everyone else pays) towards maintenance.

Again, I have no problem with paying water rates, I have no problem paying a fixed portion towards maintenance, I have no problem paying a FAIR infrastructure growth charge - I DO have a problem with continual increases and exhorbitant IGC fees.

sir1963

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#1566359 6-Jun-2016 11:26

mattwnz:
chimera: And people wonder why Auckland house prices are so expensive. Watercare are robbers. Yet another increase (I've lost count of the number of "2.5% increases" over the years), also means the house build I'm looking at doing in Snells Beach goes up again (watercare infrastructure growth charges - basically a contribution cost - are $27k, that is daylight bloody robbery) That's on top of $12k building contribution fees of course, not to mention resource consent and building consent fees. I'm totally over the council and it's only going to get worse when the unitary plan comes in (yes worse, it's more restrictive than before)

https://www.watercare.co.nz/about-watercare/news/Pages/Water-and-wastewater-price-changes-effective-1-July-2016.aspx

Isn't the infrastructure fee paid when the subdivision occurs? So it would be the developer who pays it when the title for the land is issued. At least that is how it works with my local council, as I have been through the process. I think there is a small connection fee to the water in the hundreds by the property owner when house is built. . Our local council hasn't been permitted to have water metering yet. So we pay a set rate for water. Paying for water based on usage is Bit of a con because you are using the same infrastructure no matter how much water you use. If water levels are low they restrict everyone's have anyway. Then you have overseas companies profiting on our water by selling it overseas, and paying hardly anything for it. Don't you how kiwis love to do other kiwis off., these overseas composites must be laughing at us.

What a load of bollocks.

The more water that gets used :

The more is needed to be collected and stored (dams)

The more that is needed to be cleaned/filtered , chlorinated , fluoridated.

The more water that gets used, the more goes into the waste stream (sewerage) which has to be treated. It does not matter how diluted the sewerage, it must be treated.

The more sewerage, the bigger the treatment station, pipes, etc etc etc

The more water you put through a pipe the higher the wear

Then there is the rightwing philosophy that these things should return a profit / return on assets. The more assets you have the bigger the return.

So the cost per L means the more you use the more you pay.

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