Waimea dam

Waimea Irrigation Dam or Waimea Community Bridge

18/12/2022

The hundred million dollar question is “Will the Waimea Dam hold water or have we built a $200 million bridge?”

In the December 2022 update Mike Scott CEO of Waimea Water, the dam construction company, tells us that we are still on budget but the budget is being stressed by various items such as the cost of the Mechanical & Engineering components that were never designed or priced in the original quote. Makes you wonder how we ever had a “P95” guarantee doesn’t it?

However, this has also been the story told to Council in the past. We are on budget but there are pressures. Nek Minnut a $30 million blow out. Never saw that coming! Not the first time, not the second time, not the third time. And yet here we are $195 million versus the P95 price of $76 million.

The dam is now about 84% complete as compared to the 75% complete at the last two updates. Because it 75% complete in the first update early in 2022 and then again 75% complete in the mid year update we discovered that the update percentage figure is tagged to the timeline and not the amount of work done. So, because the completion timeline was pushed out in the midyear update the percentage completed remained the same. We have now revisited the practical completion date, bringing it forward some months so the percentage completed jumps up accordingly. Who knows what percentage of the actual work has been completed between updates because we don’t measure that metric apparently.

What is more pertinent to the question that we should all be wanting an answer to (Will it hold water?) was Mr Bedrock-everywhere Scott’s comments around the grouting. Of course, most of the Councillors had no concerns at all in this regard, and were busy patting themselves and others on the back for doing such a great job to get this far.

Will all this work be in vain?

In answer to Councillor Walker’s question Mr Scott explains that the grout curtain seals substrata and stops leakage under the dam. It is a process where we drill 44 meters down into the substrata and pump concrete into the holes sealing up all the leaks. We budgeted for 5000 meters of drilling and now have completed 17000 meters of drilling which is much more than originally budgeted.

When Councillor Walker asked for clarification that they are drilling down to bedrock Mr Scott replied “No.” When then asked how far they drill he responds.”it is through the rock, all rock has permeability. The deeper you go down the longer the path so there is less flow so the grout curtain is deepest at the deepest part of the reservoir and it is through rock sealing up .. sealing .. or reducing the permeability of the rock.”

Councillor Greening followed up Councillor Walker’s questions with “In the past when you have spoken about grouting you have explained it in terms of drilling down to bedrock. Have we drilled down to bedrock given that was best practice or have we not drilled to bedrock and stopped at 44 meters?”

Mr Scott responded “Drilled through bedrock The dam is built on rock, we have cleared the overburden and got down to sufficiently strong bedrock to found the dam, drilled down through the bedr… through the rock up to 44 meters deep to reduce the permeability of that rock.”

Again, Councillor Greening sought clarification “we have got grout holes drilled down to bedrock and through bedrock is what you are saying?”)” And got the response “Through the rock that is right.”

One more attempt from Councillor Greening for a direct answer “through bedrock? draws yet another blank with Scott’s “yeah through yeah through founding rock” answer.

So what did we learn from that exchange? We learned that their initial site investigative work suggested that they would need to drill 5000 meters of grout holes. Once they started they decided that they needed to drill 17000 meters (up to 44 meters deep) of grouting. What we weren’t told is whether they believe they have now sealed the reservoir or whether they stopped due to budget or other constraints (such as still no sign of solid rock at 44 meters).

Mr Scott’s dancing around the answer of are they in solid bedrock with yes bedrock/rock/all rock is permeable/founding rock could be a confirmation of the word on the street that some of the holes were seemingly bottomless soft rock/clay. Possibly the result of building a dam on a fault line – sorry, according to Mr Kirby Council Head Engineer it is just a convergence of “shear zones” running through the dam site.

The stumbling Mr Scott did around the grouting “sealing up .. sealing … or reducing the permeability” also suggest that he was reluctant to say that the grouting to date was a success at sealing the reservoir floor, or sealing it sufficiently that we have a dam and not a bridge.

(sorry mostly sound .. skip to 40 seconds to hear start)

One thing is very clear, and that is that the initial dam site examination was woefully inadequate. If we examine Mr Scott’s comments in light of studies about dams we find that not only was the site selection particularly bad, but the investigation into the site was woeful, and now there questions over the construction process. But don’t take my word for it, lets have a look at some instances.

Our findings show that bedrock permeability is a higher-order control on flow path distribution across catchment scales, and hence on MTT scaling relationships. This is particularly significant as more and more researchers are finding that bedrock groundwater makes significant contributions to streamflow in catchments where the bedrock was previously thought to be impermeable [Gabrielli et al., 2012].
Source

This extract highlights that even “bedrock” can be more permeable than first thought, agreeing with Scott’s assertion that all rock is permeable. However, as he was reluctant to be committed to the term “bedrock” we are left questioning what kind of rock the dam is built on and where exactly it sits on the scale of permeability.

There are two main types of porosity: intergranular porosity that characterizes sands, gravels and mud, and fracture porosity in hard rock. Fracture porosity forms during brittle failure of hard rock or cooling of lava flows. Fracture networks that are connected can provide pathways for fluid flow even when the host rock is impervious (e.g. granite, basalt, indurated sandstone). Highly productive aquifers are not uncommon in fractured bedrock.
Source

Here we discover that “highly productive aquifers are not uncommon in fractured bedrock.” One would be “very surprised” to learn that there are highly productive aquifers under a dam site located between to major fault lines and sitting on yet another convergence of sheer zones! Doesn’t sound like a place you find fractured bedrock at best to me.

Fracturing of the rock commonly accompanies faulting, and a fault may be marked by a zone of fracturing rather than by a single fracture. Faults and the fracturing that accompanies them also afford avenues by which surface weathering and solution activity can attack the rock. Fault zones present a possible escape route for the reservoir water, and faults also indicate, in varying degree, the hazard of continued or repeated movement.Faults in the foundation and abutment rocks at a dam site and in a reservoir area introduce problems of bearing strength, stability, and water-tightness and, therefore, sites that contain them should be avoided. Stable dams can be designed for faulted foundations, but the cost of the necessary remedial treatment may be prohibitive.
Source

“Sites that should be avoided” if this was a dictionary entry I would suggest that the Waimea Irrigation Dam site would be the explanation following it. Not only can we expect a leaky reservoir, we can expect that there is likely to be further movements adding to our woes for years to come (should the dam be completed) and of course the remedial work might be prohibitive were it not for the fact that there is no off-ramp for this council. We must have the Kempthorne/King/Bryant/Mailing memorial no matter what.

Conclusions Monitoring of seismic activity
• Prior to construction,
• During impounding of reservoir, and
• During first years of reservoir operation is highly recommended for (i) large storage dams, and (ii) dams located in tectonically stressed regions.
Source

I found this comment particularly chilling. I don’t think there is any dispute that we have a dam located in a tectonically stressed region (in fact I would suggest we are right on top of a fault line), so have we been monitoring seismic activity at the dam site before, during, and looking ahead into the future?
As the article goes on to explain below, the pressure exerted by the reservoir water has the potential to create seismic events, especially in a site already loaded with shear zones and weak rock. This is important because any failure of the grout curtain, assuming it works in the first instance, could well see a failure of the dam by way of erosion of the foundation. I mean what are the chances of an earthquake cracking an unreinforced concrete grout curtain places on a fault line?

The statistics of dam failures performed by ICOLD [8] takes into account dams 15 m high or more or with a storage volume of at least 1 million of cubic metres. The results of this work can be summarized as follows (data from China and the URSS were not considered): the most common type of failure in earth and rockﬁll dams is overtopping (31% as a primary cause, 18% as a secondary cause), followed by internal erosion of the body (15% as a primary cause, 13% as a secondary cause), and in the foundation (12% as a primary cause, 5% as a secondary cause) ,,,
Failures leading to catastrophic consequences occur typically at ﬁrst ﬁlling and full reservoir stage, although overtopping during construction has caused, in some cases (for example Panshet dam in India, Sempor dam in Indonesia and S. Tomas dam in Philippines), several victims.

A dam [38] radically alters the natural antecedent state of stress in the valley ﬂanks and river channel; it adds weight, a more or less concentrated vertical load resulting in a complex compression and shear forces in the foundation. It transmits forces caused by loading during its operational life (water load, temperature effects, etc.). These forces produce compression, shear and often upstream tensile stresses. Water seeps into pores and rock discontinuities of the foundation; seepage forces can be considerably high and act in extremely unfavourable direction for stability of dams. The main steps of stability analysis of such a complex structure made up of rock mass and concrete structure consists of the deﬁnition of the possible modes of failure and calculation of the equilibrium conditions for stability. Geological and rock mechanical studies are required to evaluate the possible modes of failure and the variables of the problems. Analytical or numerical methods are used to assess dam foundation stability conditions.
4.1 Geological and rock mechanics studies
Geological studies with ﬁeld explorations help to determine the feasibility of a dam and decide the general layout of the works including dam type and position. The ﬁrst geological work [38] is to outline the regional and thereby the site structure, then the genesis and history of rocks and hence their stratigraphic, petrographic and tectonic descriptions which indicate the type of the problem to be expected. High-scale hydrographic and hydrogeological studies are required since a dam construction determines the presence of a new water reservoir which changes the original superﬁcial and underground water ﬂow. The principal purpose of rock mechanics studies is the characterization of the rock mass hosting the dam in order to assess deformation and strength features and to evaluate the geometrical and physical properties of singular and systematic rock discontinuities.

The Long and Short of it

17/07/2021

Tasman District Council has locked in the new Long Term Plan (LTP) for the next ten years (reviewed in 3 years). It locks you in to more debt and more rate increases, which is interesting given that I ran against a deputy mayor with twenty years experience who publicly stated he believed he would keep us within the $200million debt cap and 3% rate increases. At the time, I said I didn’t see how we could given that the dam was still blowing out (as it still is) and the costs associated with pending Government reviews such as the three waters.

That is not the only time that I challenged fiscal wherewithal of our current leadership. I challenged the continued un-budgeted spending that this Council was approving early in the term when COVID was rearing its ugly head around the world. I was told by the Mayor that this council was “well informed of the likely impact of COVID.” Two weeks later the country was in level 4 lock down and a couple of weeks after that we were passing a zero percent rate increase for the year. If our leadership were so well informed, why were they still proposing and passing million dollar un-budgeted projects?

I railed against the constant haphazard proposals to accommodate the increasing staff numbers. For instance we hired a floor above the mall for staff. At the time staff were telling me that this was a temporary measure. I said that we would never shrink back, but the CEO assured me that we would once the rolling renovations were carried out in the TDC building.

The result of the accommodation review was that we need a completely new and updated building for staff. It was deemed to be an urgent requirement and we should get right on to it. So I tried to have funds allocated in the LTP that was just passed. Staff (and management) refused to allocate any funds in the consulted on LTP.

Why? Well because we did not have a quote.

Just like we don’t have a quote, or even a plan for the Million dollars of funding set aside for a regional boat launching facility.

Just like we don’t have a location or design for the Recreation Centre proposed for somewhere between Hope and Wakefield – but we do have funds allocated.

Just like a dam that we didn’t have a quote for but had (woefully inadequate) funds set aside in previous LTPs.

After we had consulted on the LTP and before we had even signed off on it, staff were back telling us about the urgency of the accommodation problem and how we need to start taking action because of “long lead times” and “Council reputation.” Even though the Government is about to remove much of Council’s responsibilities (and staff), and may even be about to amalgamate Councils with their big-is-better attitude.

One can only speculate that the real reason that we didn’t allocate funds for this imminently urgent project is that it would have pushed our LTP debt figure of the magic $300 million figure that is politically unpalatable (and might result in the appointment of a commissioner). Apparently, Mayor Kempthorne, had earlier proposed an LTP that reached similar heady spending heights, and was told it might be wiser to rein in spending. And a figure that starts to run into Government legislated debt cap ceiling issues.

Which draws me to the “Debt Cap” that we recently consulted on. Previously, we had a $200 million self
imposed debt cap. It was a figure well above the current debt levels of the day, and set to be a ceiling.
What we have now, is very different. Even though we use the same terminology of “debt cap.”

How is it different you might ask? Well, our current $280 million debt cap, knocked down to some $250 million by moving a bit of the debt into the Dam CCO (where we don’t have to include it in our figures), is not really a cap. Rather, it is a projected level of spend. Any future unbudgeted spend will automatically push this figure up. For example, unbudgeted spend like new staff accommodation.

A real debt cap, should not move because of the spending whims of a majority of councillors. Other unbudgeted spend that might occur – and has already occurred – is another Dam blow out. Already, we are up to the higher end of the most recent budget given by Waimea Water (the Dam company). The figures included in our consulted on LTP were at the middle to lower end of the forcasted budget. And let us not forget that we are only just over half way through the build, with COVID inflation likely to push up the cost of steel and imported materials – and without further “surprises” in the “bedrock”, that Mike Scott said was better than expected.

Speaking of inflation. Another example of how out-of-touch with global reality our management are: I tried to point out the cost to the ratepayers of the proposed level debt when interest rates go to 6% or 8 %. I was challenged by the deputy Mayor as to what they would be at 2% interest.

At $250 million (and doing some simple maths) its doesn’t take much of a shift in interest rates with such high debt, to affect rates. Amidst the round of chortling from the old-boy network for even thinking interest rates would go up, he retorted that he had information suggesting otherwise. I only hope its not the same advisor, who told him the Dam price was fixed?

In a world where global inflation is at levels not seen since the early 1980’s we apparently believe that interest rates will continue at 2% levels and not 1980’s levels. These are the same people “can’t be sure” that the dam will continue to overrun. Although, councilor Mailing would not take up my wager that the dam would not be built for the most recently forecast figure, which is surprising given how much higher that figure is than the $104 million that he publicly personally guaranteed he would ensure it would be built for (and on time) at the time of the last elections.

On the dam front: it is interesting to learn that the “shear zone” which is directly under the dam abutment is “not an earthquake faultline” according to Mr Kirby our head of engineering. I was asking Mike Scott if the shear zone is what a lay person might call an earthquake faultline. He said it was not, to which I suggested that begs the question of what the difference is. Mr Kirby gave a somewhat more detailed response defending the position that a shear zone is a small fracture caused by movement elsewhere (like one of the two faultlines either side of the dam). A shear zone is a small (in this case 5 meter wide by few hundred meters long) fracture, whereas a fault line stretches many miles.

Now whether we call it a fault line or not would appear to be semantics and headline damage control. What we have is a fracture caused by earth movement that sits right under the dam structure. If the ground moves again – along a fault line that is not this shear zone – what are the chances that this shear zone will respond by opening up more? Or perhaps there will be another shear zone near by that will open up – remember there is going to be an extraordinary amount of extra pressure here once the reservoir is filled. But of course I am no geologist. And maybe the concrete band aid we are applying will stop any future ground movement and the water will not flow out new cracks, nor will the dam crumble around a failing abutment during an earthquake.

I guess we should be reassured that the recently disgraced ex-MP Nick Smith cast his engineering trained eye over the site and said he could see no issues. He also guaranteed a bottle of win to those downstream of the dam in the event of a dam failure. Which I am sure is of great comfort to those down the valley.

It is also comforting to know that we are having an inquiry into the dam process that saw us go from a “P95” (95% certain to come in on or under budget) $75.9 million dam to a “good as fixed price” $104 million dam to a who-knows-where-we-will-end-up $million dam. As mentioned before, it already has gone up another $5 million (equating to $163 million) within a week of the LTP being signed off.

What is odd about the inquiry is that it only came about after much public noise. It was previously unsupported by council as a measure of good governance practice. How times can change. A few weeks can be a long time for some memories. █████████████████████████████████ █████████████████████████████████████████████████████████████████████████████████████████████

I voted against it. Which may seem to odd to those who heard me calling for it in the first place.

The scope of the inquiry is purely retrospective. There is no provision to investigate the current management and governance of the dam which is the only place that savings can potentially be found for the ratepayer. A retrospective inquiry can be held at any time, there is no urgency, and little to be gained on this project. Yes, it would be good to expose the decision making that got us in this position but what real-world governance would allow a project to overrun three times the P95 price only half way through the job without questioning the delivery?

Unfortunately, the Office of the Auditor General (OAG) was not interested in undertaking this inquiry either – according to staff advice on the day we voted. At least that is what we were told, until councillor Greening asked for confirmation of this position. Within a few days, staff were advising that the OAG might now be interested, and that staff would be seeking clarification. A few weeks later, and the OAG advised us that because council had undertaken their own review, an OAG review was not necessary. █████████████████████████████████████████████████████████████

On the bright side, John Palmer’s (ex-CEO of the bankrupted Solid Energy and man assuring us that the dam was going to be built to the P95) brother is involved in a review of Local Government. As quoted in a RNZ interview:

Review panel chair Jim Palmer said it was a once-in-a-lifetime chance to make a difference, but warned the decisions made were “not going to please everybody all of the time”.

We look forward to another 12 months of a more-of-the-same only more expensive Council.

QUESTIONS to be answered – in my mind at least

27/03/2021

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Consider the staff reports that told us that this was an almost risk-free p95 $75.9 million dollar project. Whenever I asked questions about rising costs in the contractor space, the cost of clearing the reservoir, putting in the roads, stabilising the banks, and the risk of a Clyde Dam leak fiasco I was told about “expert opinion,” “peer review,” “P95” and all the contingencies built-in. The Waimea Water website boasted that this was the “best researched project in the history of TDC.”

There was a slight hiccup when we went out for tender, but nothing that $104 million couldn’t solve. And now we had a “good as fixed price dam” I was told when I ask what certainty there was around this price given that the P95 wasn’t worth the paper it was written on. Only $9 million of the $104 million dollar project wasn’t a fixed price.

When the board of Waimea Water was appointed they investigated the project and came back with a glowing report about how fantastic a job had been done and how they were very confident of delivering the project on time and on budget (despite the extra fees they claimed for their work).

Mike Scott arrives and is full of bravado about how he was the man to deliver the project on time and on budget, and how lucky the region was that the naysayers and short-sighted progress stoppers had not won the day. When quizzed about the lack of bedrock he proudly pointed out all the visible bedrock and said there were no problems.

At the first sign of problems, Mr Scott starts to blame the lack of comprehensive research and how there were a lot unknown unknowns to be contended with. Tasman District Council chief of Engineering produces a report telling Councillors that the Tonkin and Taylor work highlighted all these risks. Interesting that none of these risks were raised in Council Chamber previously when we had a p95 or “good as fixed price” dam.

More problems and more money is required. Once again the staff reports revert to talking about the unknown unknowns and geological risks. Now nobody is to blame because we took the best advice from all our experts. Perhaps our peer review should have been done other than our peers?

Certainly, the community raised all the unknown unknown issues of there being no bedrock on the left-hand embankment, of the P95 not being a P95, and of the costing being $100 million short. Actual dam building experts who offered to cast their eye over the project were politely declined in favour of peer reviews.

All the while Councillors were kept at arm’s length. Councillors were removed from the contract negotiation table. Councillors were forbidden to read Terms Sheets until the eleventh hour. Councillors were shut down when asking questions of staff and experts – a maximum of three questions on thousands of pages of agenda, and we don’t have time to get into that kind of detail. Councillors were also expressly forbidden for standing on the Waimea Water board as spots were reserved for irrigators.

Our “no surprises” policy with Waimea Water Ltd appears to be a case of they don’t tell us anything surprising until they can hide it no longer, rather than a case of there is a hint of an issue so they pre-warn us. Perhaps that is why no Councillors were allowed on the board?

Of course, my information could be wrong and we might not be about to be informed of another blowout that will make the other blowouts look like prematch warmup games? Time will no doubt tell – probably timed to tell just after the Long Term Plan consultation closes?

Not to worry. As the deputy mayor says, in 20 years no body will remember how much the dam blew out by, and all those who voted it through will be remembered as heroes.

Or as the Mayor is currently telling us, not to worry the Government is about to step and take the dam debt off us, along with all our water infrastructure. Of course, councils in good shape will receive a payment for their water infrastructure to spend on other things. It will be interesting to see if we don’t end up with a bill after they take our infrastructure (especially if the dam continues to head toward $300 million).

What the Mayor doesn’t explain quite as well is that this spreading of the cost to a greater rating base after the Three Water reform is unlikely to reduce the burden of debt on the water user at all. One option is that we are grouped in with Wellington and the billions of dollars that they are required to spend to bring their services up to date. Or we could be grouped with Christchurch and the West Coast that will have the same unrealistic costs to meet drinking water standards. The truth of the matter is that reticulated water is about to become less affordable here than in Saudi Arabia.

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What happened to the “hard questions” they (politicians) were going to ask after the dam blew out from $104 million to $139 million?

Yes, I think it is time there was an inquiry into how a P95 $75.9 million dollar dam has got to $182 million and is allegedly about to go significantly higher.

Given the fact that we appear to have learned nothing from the Mangawhai Sewage debacle and the lack of early intervention from the Office of the Auditor General to the many pleas from the community, I do not doubt that the Government will be quite prepared to cover their tracks with retrospective legislation again – if any hint of impropriety is uncovered should any investigation occur (for some reason there Councillors around the table voting against a report on what an investigation might look like – nevermind actually holding an investigation).

More ████ More Debt

26/02/2021

You elected more of the same, and they delivered for you.

I ran for mayor against a deputy mayor with 20 years of experience that told the residents of Tasman that he believed he could keep within our debt cap and rates cap by making the hard decisions. At the time, I said I would like to think we could but I don’t see how it will be possible with a dam that is continuing to over-run and Government reform (such as the freshwater and three water reform) increasing our costs. Other elected members also claimed to want to stay within our fiscal caps.

The first 12 months of Council saw us spending millions of dollars of unbudgeted money, which alone sent us over our already maxed out debt cap of $200 million. Not a single debt control “hard decision” in sight.

Then along came the first of the dam overruns, taking our dam from ~~$75.9 Million~~ ~~$79 million~~ ~~$83 million~~ $104 million to $139 million.

How did we propose to keep all this under our debt cap?

Easy. We just inflation-adjusted out the debt cap and backdated the adjustment to the time of installation, and like magic, we were now under the debt cap again.

Awkwardly, the dam has overrun again just before we published our 10 year plan. Now we have to rewrite our 10 year plan to get it passed the auditors approval because the figures were horribly out-of-date.

What does our “debt cap” look like now?

First of all, let us stop using the lie that it is a debt cap. It is a projected level of debt figure. It is not a cap under the current Council. We will continue to adjust it upward to accommodate spending. There is absolutely no appetite around the table to cap spending at all.

Already, we are deliberately not including figures to house our rapidly increasing staff numbers (unless Government reform robs us of our duties and our staff – in which case they will have to be housed somewhere but it is not the Council’s problem?). We know that to solve the projected numbers of staff within the next 10 years we will have to spend a figure that will push us over $300 million in debt.

How do we intend to hide debt going forward?

I am pleased you asked.

We are concurrent with the Long Term Plan consulting on a proposal to create a holding company to amalgamate the Port and Airport under. Sounds pretty harmless?

The purpose of creating this new CCO is that we sell our shares in Port Nelson and the Nelson Airport to the bank. Much sneakier than the less politically palatable prospect of selling the shares directly. Once we have established the CCO we can move debt into the company and then for accounting purposes we don’t have to record it as debt on Council’s books.

Instantly, we can pay out special dividends to the Councils and load the new CCO with debt magically reducing our debt levels. I say magically because we haven’t reduced our debt, but we have reduced future dividends from the Port. Effectively, we have sold our shares to the bank.

I am sure the Council spin doctors will tell you a different story.

I tried to ask for some accountability within Council…

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I also asked for accountability around the statement made to Councillors on the day the dam was signed off, in response to a question that I asked of what assurance do we have the dam will be built for $104 million given that we had a “P95” at $76 million. We were told that we are even more sure, “it is almost a fixed price contract” now. There was only a tiny portion that wasn’t fixed price and we had the “equivalent of 30% contingency” on the small amount that wasn’t fixed price.

Obviously, this was a case of my word verses others word as to what was said and the mayor wasn’t prepared to debate that, so again, there will be no accountability for fabrications told. I previously asked Mike Scott for an estimate of how much of the contract was actually fixed price. I have not been provided with that information.

Have we seen the last of the dam over-runs?

Based on the previous performance of Waimea Water and the irrigator run predecessor to Waimea Water, it is highly unlikely that the dam will be delivered for $164 million.

Meanwhile, back in the Council Chambers:

In the recent Council meeting, the Deputy Mayor moved a motion to reverse the decision that I had previously managed to get passed where the irrigators would be target rated for “their share” of all future cost overruns. The proposal now being consulted on has the ratepayer picking up even more of the irrigator share of the dam. Surprising that the people of Murchison and Tapawera are so supportive of this approach. But then I guess I shouldn’t be surprised because this is apparently also the view of Golden Bay and the majority of Motueka, Richmond, and part of the Moutere.

To illustrate the gross subsidization of the handful of irrigators that the Waimea Irrigation Dam was built for, the proposal that I had moved for consultation would see the rates being paid by irrigators on the Waimea Plains are almost identical to the water users downstream of the Kainui Dam.

Let’s put that in perspective. The Kainui Dam built some 15 years ago at a final cost of around $3 million dollars is costing the water users a similar amount to the projected cost of the Waimea Irrigation Dam (at the $139 million figure) if we target rate the users for “their share” of the costs. So not only would the Waimea water users not been paying any more than the users of a $3 million project, they wouldn’t even be paying for 15 years worth of inflation.

Your duly elected members think it unfair that the Waimea irrigators should even be paying more than the Kainui Dam water users. Therefore, they have proposed that we consult on a financial model whereby general rate-payers pick up all the overrun costs (both the current estimated extra $30 million blow-out and any future blow-out). Once the precedent is locked in, it will be in perpetuity.

In addition, I am informed by members of the community that the running costs of the dam that were well below a million dollars when we had a P95 $76 million dollar dam, and are now predicted to be $3 million a year, will likely be double that again by the time the dam is commissioned.

This information is of course coming from the same “naysayers” and “fear mongers” that said the geology of the dam site would mean costs would be far in excess of the P95 price that Council was touting. And despite Mike Scott’s assurances that they were on bedrock and there was bedrock plainly visible up the valley, it turns out to be more of a “moonscape” and has caused the budget to blowout again. Who is more reliable?

To summarise: we are consulting on a debt cap, that is not a debt cap but a debt target, of $280 million. It is a fabrication that does not reflect costs that we already know will push it over $300 million. We plan to hide more of that debt by selling our shares in the Port and Airport to the bank under a proposed new company structure. General rate-payers should subsidize the Waimea irrigators further because they can’t afford their almost free water. You haven’t seen the last of cost increases for the Waimea Irrigation Dam.

This is the choice you endorsed at the polls, and they have delivered for you.

Same Again With Different Results

04/05/2020

The Council trend of more of the same continued last week, sorry, the same results after all.

On Tuesday we voted for more unbudgeted spend to expedite our Freedom Camping bylaw review. How anyone could imagine that we are going to be plagued with Freedom Campers over the next 12 months to 2 years is beyond me. Even if we were to experience previous levels by some magical doing, what projects should we chop from the work program to cover the $60 000 of unbudgeted spend?

The trouble with all this ad-hoc spending is that we are not weighting projects in any order of priority and we have no idea what other projects are being impacted (if we are not lifting the debt cap as claimed). As we would if the spend was allocated during an Annual Plan or Long Term Plan process.

The issue of Freedom Camping was a Government created one, and it requires the Government to sort it out. At the very least, the situation of non-self-contained vehicles and their rights needs to be addressed.

Undeterred, Thursday’s meeting also more unbudgeted spend allocated. This time, to consult the populace about permanently chlorinating our water supplies. Although this agenda was conspicuously quiet about the amount of unbudgeted spend required, when I asked what figure we are talking about Richard Kirby assured me it was only $15 000 to $20 000 at the outside.

Interestingly, every other time we talk about a public consultation the figure always seems to come back as at least $80 000. I guess it is not without expectation that the man who assured us the dam would not go over $83 million might have underestimated the cost of public consultation in this instance. I look forward to receiving the cost post consultation. If Mr. Kirby is correct, then it will be interesting to hear why other consultations need to be so expensive.

The question I had was that why are staff and some Councillors so desperate to push this through at the expense of holding a special consultation when the same staff report suggest that the Government are likely to make chlorination of public water supplies compulsory? It is absurd that we would jump ahead of the Government at our expense, when there is a high likelihood that the majority of our Community will respond against Chlorination – as Councillor Tuffnell pointed out.

Councillor Tuffnell’s concerns were that if the majority of the consultation respondents were of a negative view, where would that leave the Council given that Government were indicating it was necessary. Having been on the Council last term with Councillor Tuffnell I was surprised he didn’t recall the decision to ignore 80% or more of the submissions with regard to the funding model of the dam.

Speaking of the dam, I am looking forward to an update next week. It appears that the initial flurry of Shane Jones spending on water augmentation did not reach far from his home patch. Does he have any chump change left to throw at the Waimea irrigation dam? Time will tell.

If the Government doesn’t bail out the woeful project overruns, then the ratepayers of Tasman will be facing significant increases. Perhaps none more so than the water users on the Waimea Plains who bought one or two shares just to see them through a drought.

Part of the prerequisite to making the dam “affordable” was to make it impossible to own land on the Waimea Plains without being affiliated to the dam – if you wanted to do anything productive with land, or even run a few stock. So, the Council implemented some draconian water regulations that cannot be slackened off without a $50 million pay-out to our dam “partners.”

John Palmer insisted that the general ratepayer had to pick up more and more of the dam expense to make the water “affordable” for all. He admitted that the bigger players on the plains could probably afford to pay more for their water, but unless the costs were such that the small holders were able to participate the project would not work.

Well John, I am sure that these small holders are keen to hear how it is that they must wear the brunt of the cost blow outs and maintain any sense of affordability.

What was undoubtedly not explained to them was how the overruns would be distributed. The Council cannot charge water users for water. Those of you on urban supply might think otherwise, however, you are wrong. Council supplies everyone water free-of-charge. Urban users do pay for the cost of maintaining the Council supply which is apportioned according the volume of water that you use. The difference may seem subtle but has significant implications when we move to the irrigators.

The Council has the ability (and right) to apportion the dam overruns to the irrigators, even though the Waimea Irrigator Ltd contribution is technically capped. This extra charge can be done via our rating powers.

However, because the Council does not/can not charge for water, and because there are no pipes running from the dam, we cannot charge a maintenance type fee based on water usage, we can only charge per property affiliated. Currently that is set up so that the $650 000 of loan payments will be distributed according to capital value of the affiliated water users. This will be on top of the general ratepayer in the zone of benefit capital value-based contribution.

The unfairness of this becomes apparent when you consider that many of these one- or two-unit shareholders have quite high capital valuations in comparison to their water use. Even more on-the-nose is that some of the bigger shareholders do not have land associated (or very little land) with their shares so they cannot be rated. This shortfall will be picked up by the others – including the small players that we had to “make the water affordable” for.

While I feel for the people caught out by this situation, I am still fresh from an election campaign where my efforts to point out the issues with the Waimea Dam were thrown back in my face with phrases like “short sighted,” “nay-sayer,” “political mannequin” and “against progress” (with quite a few less polite ones too). So, I guess now I get to sit back and see how “more of the same” works out for you.

What if I told you, you can't fix a broken system by voting to keep the same system

A situation that is especially concerning with a Council bent on unbudgeted spending on top of Dam overruns, and a rate freeze, to compound the issue. The Mayor who was “fully aware” of the impacts of COVID-19 just prior to lockdown while endorsing millions of dollars of unbudgeted spend is now relying on our region’s diversity to lessen the impact of local unemployment

While at the same time continuing with the Government and Local Government New Zealand policies of keeping up the Council spending to buy our way out of a recession. Twyford making threats to keep Council spending up (if we want Government money) can only be attributed to the fact that the Government are panicking that the wheels might fall off their trolley just before an election.

Whereas my thinking is more aligned with former Christchurch council finance chairman Raf Manji (also quoted in the same Stuff Article.)

Who said while councils should be looking at their books, local government “does not have the ability to magic up $50 billion of new funding”.
Former Christchurch councillor Raf Manji believes the government should consider removing GST from rates to help ratepayers.
“Its funding options are limited and its funders, the ratepayers, are going to be under major financial pressure from the current economic shock.
“If central government is so keen to see projects go ahead, they can fund them directly, and at a much lower cost than local government.
“Whilst they have their chequebook open, they could also remove GST from rates, thus returning $750-800m back to ratepayers.”

Waimea Irrigation Dam or Waimea Community Bridge

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Same Again With Different Results

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