Council is getting ready to adopt the annual plan for consultation this week. In the current Long-Term Plan,
we expected rates to increase by almost 11.79%, but now it has been reduced by an average of 7.7%.
The cost of water services is expected to keep rising in the coming years, making it the hardest cost for our
community and ratepayers to afford.

This makes our current consultation on whether to continue as we are under new rules, or to join with the Wairarapa councils
very important. Please get involved before 22 April when consultation closes.

The rising costs are due to a large ongoing capital works programme, new regulatory changes, and inflation
interest cost. Of the proposed 7.7% rate increase, 4.47% is directly related to water, wastewater, and
stormwater. However, this is a largely urban ratepayer cost, so its effect is much greater for those ratepayers.
Without water services included, the draft average rates increase would have been 3.23%.

New costs from the Central Government are to fund the Water Service Authority - Taumata Arowai and the Commerce
Commission. Their fees are estimated to be 0.25% of the overall rate rise. However, simplified standards, new
engineering designs, and access to funding will result in better outcomes, and consumer price protection.

The continued rise in the costs of providing water and wastewater is one of the key reasons for considering
alternate delivery models like the Wairarapa – Tararua Council Controlled Organisation. Successive
governments have signalled the need for change, to deliver better and making it more cost-effective for
ratepayers.

We have put a lot of effort into developing the model and believe the Wairarapa-Tararua model provides the
most long-term benefit to the community.  As we consult with the community, we have seen some
of the problems of getting it wrong, like Wellington Water. The key differences between Council Controlled
Organisation and Wellington Water, is that the assets and our staff will transfer to our Water Organisation
whereby Wellington Water primarily contracted work out and they did not own the assets. Councils,
as shareholders of our Water Organisation, can still maintain control through a letter of expectation to
the Board of Directors. The Board then prioritises and funds the work required with oversight by the
regulators.

As an update, the Dannevirke Impounded Supply has been performing well since the major repair in
July 2023. To check its performance, we have been operating it at a water level of 9 metres, well below the
maximum level of 12 metres. Minor leaks have been repaired with it being monitored continuously and daily.
We are now progressing with land purchases to build the plant with the capability to treat more turbid water
directly from the river and build new treated water storage.

This will be done before any further work might be considered on the dam. Our teams are doing
a great job of managing water supply and demand every day in all our towns.