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Funding and Subsidies - Sewerage Schemes

Date:
Categories:
Official Information Requests

Sent: Monday, 18 November 2024
Subject: LGOIMA request - Funding & subsidies for Sewerage Schemes

15/6/2007

Mayor Kevin Winters of Rotorua District Council wanted to see sewerage schemes in place at:

  • Rotokawa/Brunswick
  • Okere/Otaramarae/Whangamarino
  • Okareka
  • Gisborne Point/Rotoiti/Hinehopu
  • Hamurana/Awahou
  • Tarawera
  • Rotorua

Rotorua Lakes Council applied for $50M government subsidies through the Ministry of Health Sanitary Works Subsidy Scheme, so sewerage schemes could get underway. Their bid failed.

28/7/2008

Local Government Conference - Prime Minister Helen Clark

Government major one-off investment for $72.1M is announced.

The total cost of the programme put forward by the Council was $144.2M for the four priority lakes; Rotorua, Rotoiti, Okareka, Rotoehu.

One of the key components was;

* Construction or extension of sewerage works to pick up waste from un-sewered lakeside communities around Lakes Rotorua, Rotoiti, and Okareka.

The other 50% of the cost will be funded by the Rotorua District Council and Environment BOP, both of which committed to this funding in their Long-Term Community Consultation Plans.

Government Funding investment is $18M per lake when divided by the four lakes. Together with RDC and EBOP funding is $36M per lake when divided by the four lakes

My questions are:

With all this $144.2M funding commitment for four lakes including Lake Okareka and Lake Rotoiti;

  1. Why was there no subsidy or funding from the $144.2M funding commitment, allocated towards the Lake Okareka and Lake Rotoiti/Rotoma reticulated sewerage schemes? In particular, the $72.1M government major one-off investment.
  2. Why did the Rotorua District Council have to get additional funding from the central government for 50% with a maximum of $4,600,000 for the cost of the Lake Okareka reticulated sewerage scheme, with RDC contributing $1,500 plus GST per household, and ratepayers contributing $11,048 plus GST each?
  3. Why did the Rotorua District Council have to get a $10M loan from the Ministry of Environment to be repaid over 10 years from the Lakes Enhancement rate for the cost of the East Rotoiti/Rotoma reticulated sewerage scheme, with RDC contributing $2,700 incl GST per household, and ratepayers contributing $22,486 including GST each?
  4. Why wasn't the $72.1M government funding divided by the seven lakes requiring sewerage reticulation, as per the failed Council application for government subsidies from the previous year in 2007?

This would equate to $20.6M towards each lakeside community scheme if subsidied with 100% of the combined funding commitment.

Response

I refer to your LGOIMA request of 22 October 2024 (highlighted) above, specifically:

  • Why was there no subsidy or funding from the $144.2M funding commitment, allocated towards the Lake Okareka and Lake Rotoiti/Rotoma reticulated sewerage schemes? In particular, the $72.1M government major one-off investment.
  • Why did the Rotorua District Council have to get additional funding from the central government for 50% with a maximum of $4,600,000 for the cost of the Lake Okareka reticulated sewerage scheme, with RDC contributing $1,500 plus GST per household, and ratepayers contributing $11,048 plus GST each?
  • Why did the Rotorua District Council have to get a $10M loan from the Ministry of Environment to be repaid over 10 years from the Lakes Enhancement rate for the cost of the East Rotoiti/Rotoma reticulated sewerage scheme, with RDC contributing $2,700 incl GST per household, and ratepayers contributing $22,486 including GST each?
  • Why wasn't the $72.1M government funding divided by the seven lakes requiring sewerage reticulation, as per the failed Council application for government subsidies from the previous year in 2007?

In answer to each question:

1. Why was there no subsidy or funding from the $144.2M funding commitment, allocated towards the Lake Okareka and Lake Rotoiti/Rotoma reticulated sewerage schemes? In particular, the $72.1M government major one-off investment.

As advised in a previous LGOIMA response, Deed funding (part of the $72.1m) was allocated to 4 targeted lakes – Lake Rotorua, Lake Ōkareka, West Rotoiti/Okere and East Rotoiti/Rotomā.

2. Why did the Rotorua District Council have to get additional funding from the central government for 50% with a maximum of $4,600,000 for the cost of the Lake Okareka reticulated sewerage scheme, with RDC contributing $1,500 plus GST per household, and ratepayers contributing $11,048 plus GST each?

No additional funding was received. The Deed funding contributed 50% of the final actual costs.

WW Reticulation Programme

Date

Gross
actual costs

“Deed” Funds

Local funds ratepayer

Lake Ōkareka

2007-2009

$8m

$4m

$4m

3. Why did the Rotorua District Council have to get a $10M loan from the Ministry of Environment to be repaid over 10 years from the Lakes Enhancement rate for the cost of the East Rotoiti/Rotoma reticulated sewerage scheme, with RDC contributing $2,700 incl GST per household, and ratepayers contributing $22,486 including GST each.

Council (RLC) did not get a loan from the Ministry for the Environment. RLC sought to ensure that the “Deed” principle of 50% contribution to actual final costs of a scheme was adhered to.

The Rotorua Te Arawa Lakes Strategy Group (RTALSG) partners agreed that $10m was to be reallocated from other water quality projects to East Rotoiti/Rotomā.

The RTALSG partners also agreed that other nitrogen reduction programmes must be completed and the $10m must be reinvested through the Lakes Enhancement rate.

4. Why wasn't the $72.1M government funding divided by the seven lakes requiring sewerage reticulation, as per the failed Council application for government subsidies from the previous year in 2007?

This was a decision of the Government of the time when the Deed funding was allocated.

Additional questions received 23 October 2024:

1. Were any of the government grants or subsidies paid by central government to the lakes sewerage schemes, part of the $72.1M investment announced at the Local Government Conference at the Energy Events Centre in Rotorua on 28th July 2008?
Only the “Deed” funding of $42.5m.

2. Did the Rotorua District Council and Environment BOP match the government funding with 50% of the cost to each lakes reticulation scheme, as communicated in the Local Government Conference at the Energy Events Centre in Rotorua on 28th July 2008?
Yes

3. Which Long-term Community Consultation Plan committed the other 50% of the cost funded by the Rotorua District Council and Environment BOP?
2009-2019, 2012-2022, 2015-2025, 2018-2028, 2021-2031 and 2024-2034

4. Has the full amount of $144.2M been spent? ie: Central government investment and RDC & EBOP 50% matching contributions. Please provide a breakdown of expense category and the organisation or entity that received payment of funds.

For RLC, the allocated Crown funds were used for the targeted lakes reticulation schemes. The last allocation to support schemes was for East Rotoiti/Rotomā.

The funds (gross RLC and Crown) were used to cover costs for planning, legal, consenting, design, contracting, labour etc for all schemes. To provide a breakdown for each scheme in the detail requested would take a significant amount of staff time, estimated at approximately 4 weeks (160 hours). Council is entitled to charge for time in excess of one hour and, as per the Ministry of Justice charging guidelines, our normal practice is to charge $38 per half hour or part thereof. Therefore, to complete this part of your request would incur a cost of approximately $12,160. For this reason, Council is declining this part of your request as per section 17(f) of the Local Government Official Information and Meetings Act ‘the information requested cannot be made available without substantial collation and research’. However, if you wish to proceed and incur the cost please advise. You will be invoiced for this amount and payment will be required prior to commencement of the collation.

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