Auckland's "One Rating System"

I wrote about Watercare a few weeks ago here. This advertisement has been placed frequently in NZ Herald and other news media. There has been discussion in letters and other news comment.

I support volumetric charging for wastewater, because I think the true costs of water infrastructure and its consequence - wastewater infrastructure - need to be better understood by those who use the services, so that they use it more knowingly, and more carefully.

But I do think the tail is wagging the dog here. Watercare has seized the opportunity of carving out its own business space, its own business plan, its own infrastructure development plan, and its own funding plan. Without much attention to the broader public interest.

There's nothing really new in that. From the moment amalgamation was suggested, Watercare was down in Wellington lobbying furiously to separate stormwater from water and wastewater services. (Hard to run stormwater as a business... etc etc). And now it wants to issue monthly bills....

My first letter to NZ Herald went like this:

“One council – one rates bill”. That was a catchphrase used to sell Auckland local government amalgamation.

Now we have a communications deluge - from a Council Controlled Organisation - warning Auckland ratepayers to expect no less than twelve water rate bills each year.

Disingenuously, Watercare announces this measure is in response to “customer feedback”, though I am not aware of any public consultation.

Sending and administering twelve water bills to one million ratepayers will cost ratepayers in excess of $10,000,000 annually. At least.

I understand Watercare has taken this step because that’s how privately run cellphone and electricity utilities operate.

But there’s a difference. Electricity and cellphone customers have a choice of provider. They need and expect monthly usage information. They shop around for the best deals and they can switch providers in a blink.

However there’s no competition for what Watercare provides. Watercare could provide accurate monthly usage analysis to ratepayers – presuming water meters are read frequently enough – through an appropriately secure website.

Watercare should minimize the costs of providing water and wastewater services and act in the public interest.

Many other letters have been published. Watercare's media people responded with a statement which added fuel to the flames, triggering some more robust comment. Including my response:

Watercare's letter justifying its plans to bill ratepayers every month for water services refers to private research showing that customers want monthly billing to better manage finances.

The letter also reports that Watercare achieved regional savings of $100 million last year.

This is a good saving and makes a dent in Auckland Council's annual expenditure of $3 billion. But it does not justify wasting that money on an expensive separate billing system when amalgamation was sold on the basis: One council = One rates bill = Efficiency.

Watercare's letter talks about the true cost of supplying water to Aucklanders and describes itself as a minimum cost operator.

If Watercare and Council were sincere about cost minimisation and genuine about helping ratepayers manage their finances, then there would be just one Council services bill - maybe monthly - listing each council service provided and its cost.

Ratepayers would know at a glance how their rates were being spent, see what each of their services cost, and benefit from further regional savings.

And then on Wednesday, last week, we had this advertisement in NZ Herald. Placed by Auckland Council - probably in damage control - rate bills about to hit the streets. The advert ran on page 13 (NZ Herald, 4 July 2012), while Watercare's ad (the one above) ran on page 22 (don't know how many times that advert has been placed). Watercare's is much bigger, easier to read. Both carry the Auckland Council logo (small in Watercare's case).

What's the poor ratepayer going to make of these public relations exercises? Auckland Council's advert insists that there is "one rating system". I guess you can have "one rating system" and then issue two different rating bills, supported by two completely different advertisements on different pages, without much in the way of obvious connection, and still be speaking the truth.

Or is it just expensive propaganda?