General overview

Environment Canterbury is seeking a more equitable mix of funding for its water investigations and monitoring work – also known as the State of the Environment monitoring – which is required to understand the nature of Canterbury’s freshwater resource.

These costs are currently fully funded by general rates. From 1 July 2010 the Council intends to recover a proportion of the cost of this work from consent holders. Implementation of the decision (originally intended to occur in July 2009) was deferred by 12 months to 1 July 2010 to allow more time for consultation with consent holders and stakeholders.

Freshwater investigations and monitoring

Environment Canterbury’s water quality, quantity and ecosystems work programme enables it to understand and manage the region’s freshwater resource. The total budgeted cost for 2010/11 is $24.4 million. Of this, $7.7 million is allocated for state of the environment investigations and monitoring work.

Examples of the environmental monitoring work include the measurement of river flows and groundwater levels, the monitoring of groundwater and surface water quality, as well as monitoring ecosystem health of lowland streams, inland lakes and coastal lakes and lagoons.

The investigations programme looks at how surface water and groundwater interacts, identifies contaminant sources, predicts system responses to abstraction or changes in land use, and includes working with consent holders on measuring water takes.

This work is an important part of Environment Canterbury’s responsibilities under the Resource Management Act to identify issues requiring action, either now or in the future.

Dividing up the costs

Currently 100 per cent of the investigations and monitoring work (refer graph) is funded from general rates. From 2010/11, the funding will come from a combination of general rates and user charges.

This decision, in the Council’s 2009-19 Long Term Council Community Plan, was the result of a review of sources of funding and the use of general rates, with the intention of seeking a more equitable revenue structure.

The Council wanted a revenue system which reflected a balance between ratepayers who benefit from council services and those who drive demand for council services.

It is intended that freshwater investigations and monitoring is funded as follows:

• 70% from general rates
• 30% from consent holders, as a charge under section 36 of the Resource Management Act 

The Working Group considered the 70:30 ratio in some detail and has also sought advice from an independent expert panel made up of economists and scientists from Dairy NZ, Lincoln University and Landcare Research.

The independent expert panel considered the cost of each project and the distribution of costs between the different consent classes and found 51 per cent of costs could be attributed to consent holders. For both investigations and monitoring projects a key consideration was whether consent holders either contributed to the need for the work, or benefitted from the work more than general ratepayers.

The Working Group considered the 70:30 split was consistent with Council proposals in the initial consultation on the Long Term Community Council Plan, and to an extent is more consistent nationally when the figures are compared with how other regional authorities assess public and private benefit splits.

Zones

Under the proposal, the investigations and monitoring programme will be allocated to 10 zones across Canterbury. For each zone there will be a planned programme of work, the costs of which are then allocated to the consent holders in that zone. The Working Group recommends using the zone boundaries developed via the Canterbury Water Management Strategy, once they are finalised. It also recommends the cost recovery mechanism is calculated on a zone by zone basis based on the amount of work in each zone.

Further information on how the zone costs are allocated (pdf 13 kB)

Local accountability and decision-making

The need for local decision-making and accountability were strong themes in submissions to the Working Group.

It is proposed that local accountability be via the Canterbury Water Management Strategy zone water management committees which are being established during 2010, or by an interim committee if a zone committee in a particular zone is not in place by August 2010.

Proposed allocation of costs to consent holders

Environment Canterbury is seeking feedback via the Annual Plan consultation process on the proposed options for allocating costs to water-take consent holders and to consents holders for discharge to land or water.

As a fundamental principle, those consent holders with larger takes will pay more than consent holders with smaller takes.

After consideration of submissions, the Working Group has proposed the following methods of allocating costs to consent holders:

Water take consents

The water management cost recovery charge is proposed to be based on the relative size of each consent, while recognising the economies of scale in the delivery of state of the environment investigations and monitoring programmes.

In practice this results in the level of charge increasing as consent size increases, but at a decreasing rate for each successive unit of consented volume.



Discharges to land or water

A fixed charge of 20% of the total zonal water management cost recovery recognises a portion of costs can be attributed to all consent holders.

The distribution of the remaining 80% of the total zonal water management cost recovery, is based on the nature of the discharge.

Each type of discharge is assigned to a band with a weighting of 0, 1, 2, or 3, which reflects its relationship to the state of the environment investigations and monitoring work. A discharge in band 3 will incur a charge three-times the amount of a discharge in band 1. Discharges in band 0 will incur no cost.

* Discharge consents are allocated on the basis of three bands relating to their relationship with state of the environment investigations and monitoring work.