Mangawhai Bankrupts KDC

There's been a lot of comment in the media lately about the size of Council debt. The Sunday Star today (citing data quoted by Local Govt Minister Nick Smith) puts Kaipara District Council at the top of that list - in terms of debt/capita - at $4142/resident.

The total debt of KDC is $90 million - according to "Legal Eagle" (mouthpiece of activist Mangawhai) - of which some $63 million is for the local Mangawhai Sewerage Scheme.

My involvement with this matter, and my interest in it, goes back a few years....

Twelve years ago I was invited to help the Mangawhai Residents and Ratepayers Association (MRRA) make submissions on a pro-development plan change (Plan Change 9) that was being foisted on Mangawhai by Kaipara District Council.  MRRA approached me because of my experience working with North Shore City Council on its wastewat4r network and system, and because of research I'd done abroad on alternative community wastewater systems. After  preliminary investigation, on 1st August 2001, I wrote in the Herald:

....Mangawhai is the latest community to be on the receiving end of a Council imposed sewage treatment scheme. The local Residents and Ratepayers Association has called for a Septic Tank Bylaw and is anxious to consider alternatives which keep costs down. However Kaipara District Council, under pressure from the Regional Council to clean up the Mangawhai Estuary, and from developers keen to follow the Cooks Beach example and get intensive subdivision development underway, are pushing ahead with a proposed $16 million sewage scheme. Kaipara District Council have decided they cannot fund the project, and have instructed Beca’s to put the whole project out to private tender. I am advised five private organisations have been shortlisted. These include overseas companies....

There are a number of things that are interesting about this quote. For a start there's the figure of $16 million. That's what KDC reckoned it was going to cost.

At the time, there was significant concern about reported levels of enterococci in the Mangawhai Estuary - an indicator of the presence  of faecal colliform from human sewage. The same indicator was routinely measured on North Shore beaches - and levels were used there to decide where most energy was needed in making the city's wastewater networks more leakproof. At great expense.

However, again at the time, North Shore City Councillors were skeptical about what these enterococci reports were telling us, so we required officers to measure for actual faecal colliform microbes, so that we really knew what was happening. These measures were done for some time, and officers reported that enterococci could indicate the presence of a range of microbial things, including from rotting vegetation, stormwater ponds that hadn't drained, dog poo in the gutter and on the roadway for example, and cow shit - as well as from sewage network overflows.

I advised the MRRA to require Northland Regional Council and KDC to properly investigate what was causing the enterococci levels to be elevated in the estuary - before commiting to a wastewater network system as the solution to a problem that could be caused by rotting vegetation, farming etc etc.

However it was clear that the fundamental reason for KDC's enthusiasm for a new traditional sewerage system was that it supported calls from land owners and developers who wanted to develop their land, and subdivide down to lots of around 400 square metres. That sort of urbanisation was in conflict with the large lot development that had characterised Mangawhai hitherto. Bach owners and resident lots were around 1200 to 1500 square metres - big enough to accommodate an onsite wastewater system based on a good septic tank and a drainage field. The underlying land being largely sand - drainage was appropriate and effective.

So. Intense urban development proposals required a networked wastewater system - sewers and a wastewater treatment plant - and existing property owners were advised that their onsite systems were polluting the estuary. At the time I couldn't believe the draconian and uncaring way that KDC went about imposing this vision on this seaside community.

I still have a copy of the submissions that were made by MRRA to KDC about Plan Change 9 (PC9), and the associated "Infrastructure Plan". Extracts include:

...MRRA are particularly concerned that Mangawhai residents themselves have been insufficiently consulted over the implications and consequences of PC9. The consultation with the community over the infrastructure study, what should be done, what options to pursue, how a possible community sewage scheme should be funded, how it should be built and owned, are all severely deficient – given the huge issues for the community....

We have even more of an issue with what is proposed for wastewater, and how that has been shared with the community. The MRRA recognise that how we tackle wastewater is fundamental to the proposed zonings in PC9. Many of the proposed changes cannot go ahead – or at least cannot be made to happen in real life - without the proposed community waste water system. The huge increase in urban intensification envisaged by PC9 for Mangawhai can only occur with a reticulated sanitation system. We believe there is a gap in the council's communication over this. It is hugely controversial, building something as expensive as a community sewage scheme, and involving the private sector in the manner proposed. It represents a major political shift in service provision. I am not aware that the community has really much of an inkling as to the possible impact of what is proposed - in terms of costs, changes in accountability, what their options are - and indeed whether they have been asked whether this is what they want for their community....

We are of course aware that PC9 does not explicitly mention any costs for the proposed Community Sewage System. PC9 is explicit about financial contributions required for stormwater and roads, but is silent when it comes to wastewater. Documents we have sighted suggest the capital cost of the sort of system which seems to be preferred by Kaipara District Council and its consultants – Beca – is $16,000,000. There are 1200 affected lots in Mangawhai Township now, and PC9 envisages a further 535 – giving a total of 1735. If we all paid equally for this sewage system, it would cost each ratepayer $9221. But PC9 is silent about this huge sum of money. If ONLY the new lots were required to pay – because the rest of us tidy up our septic tank systems – then the cost per new lot would be more than $29,000.....

And it goes on.... I include it here to give you an insight into how it felt for the community as KDC went about its decision-making. Residents had no idea what was happening on the wastewater cost front. They didn't even know if they would be forced to connect. The MRRA made submissions to the effect they would accept an onsite system bylaw, empowering the council to make onsite inspections, and requiring repairs to bring onsite systems up to standard. But to no avail. KDC wanted a networked sewerage system come hell or high water, because it wanted to allow relatively dense subdivision and development of adjacent lands.

Ironically, after renting a bach at Mangawhai Heads for a few Christmas holidays between 2006 and 2009, we purchased the family bach there around 2010. Fantastic. This was about the time KDC unleashed its contractors on the local road networks to install the sewerage network. It was interesting to be on the receiving end of this - as a ratepayer - and as the new owner of newly upgraded onsite septic tank system and drainage field which I was very proud of.

I tried to get the Council to allow us to remain connected to our own onsite system, but they insisted (as I knew they would) that given my house was "passed by a sewer" we had to connect. Like many Mangawhai residents we were very reluctant. For a start there was the desire to maintain the status quo, then there was the worry about "where will the pipes go" and "what about my garage"...., and there was the concern about how much it would cost to connect.

I remember the communications that came eventually about this. We were told that "existing ratepayers" would be charged "one off levies" of around $4,000, while "new connections" would pay around $8,000 (these are approximate figures only).

Still nothing happened, apart from the obvious fact that sewer pipes were laid in the streets (that's another story). I was reluctant to do anything because of the worry of how it would upset the bach, plantings, fences, driveway, etc. And so - I imagine - were hundreds of other ratepayers. Then a letter came from KDC offering a "free connection installation", provided we took up the offer by a particular date. Again I was a bit slow, but talking to neighbours I learned contractors were doing quite a good job, so I got on the phone, said yes, was sent a rough diagram of the route they proposed for our connection, I made some modifications, which were accepted, and when we next went to the bach it was all done. Fantastic job. They'd run the connection up a side driveway, installed a manhole, put a lateral, sawed a gap along about 10 metres of concrete drive and footpath, laid the pipe, reconnected from our onsite system to the network, reconcreted, and made good the fence etc. Very tidy job. I guess it would have cost the Council about $10,000 (based on my experience that a council project usually costs about 3 times what it would cost if done directly by private sector - for a variety of reasons public works are expensive.)

So we didn't have to pay that. We did have to pay the "one-off levy" connection rate of about $4,000. But as you can see, it would not cover the cost of the system - even if it had only cost $16 million.

So now the cost has blown out to a reported $63 million. Well. If 1000 residents got a free physical connection, like we did, that would add another $15,000,000.

But the real problem for KDC is that its plans suffered from the collapse of the coastal property market. It installed a wastewater network to support a property boom which never came. It borrowed money, just like all those real-estate investment companies did that went bust. But Councils don't go bust. Well. They haven't yet in New Zealand.

I am pleased that the Auditor General has agreed to review the decisions made by KDC about this matter. It needs to be a very full review indeed.