KEY POINTS:
Water bills are set to rise across the Auckland region with the monopoly water supplier planning eight years of price increases to pay for capital works.
First in line to pay higher bills are Auckland City householders and businesses. They face a 9.1 per cent rise after the Citizens & Ratepayers Now group voted in secret with Auckland Mayor Dick Hubbard and his deputy, Bruce Hucker, yesterday to push through the increase.
This will lift the average household water bill from $800 a year to $1000.
The increase follows a 9.6 per cent rise just 10 months ago and revelations that the region's bulk water supplier, Watercare, is planning to double its prices between 2008 and 2016 to pay for capital works.
There is also a proposal for Watercare to pay a dividend to local councils, which would lead to even bigger price rises for households and businesses across the region.
Auckland City officers have begun crunching the numbers on the impact of the Watercare price rises and the cost implications of a potentially costly tax matter to do with its own water retailer, Metrowater.
Work has also started on the size of next year's increase by Metrowater.
Metrowater chairman Ross Keenan said yesterday a 10 per cent rise by Watercare equated to a 5 per cent rise in the retail price to customers.
He said even before the proposed Watercare increases, Metrowater would have to raise prices next year to meet the council's demand for a $26 million dividend. "One can't argue that the price of water and the value of water is assuming new dimensions," Mr Keenan said.
Mr Hubbard said he voted for the 9.1 per cent increase because the consequences of reducing it were "too horrendous".
It would have added about 4.3 per cent to this year's overall proposed rates increase of 3.6 per cent, cuts of $12 million to essential work like footpath renewals and roadworks, or a combination of both.
Asked if this confirmed the contention by some councillors that the council was using Metrowater as a "cash cow" to keep rates down, Mr Hubbard said the Metrowater dividend was being spent on stormwater. Money earmarked for stormwater was freed up for spending on other things like footpaths.
Green Party councillor Neil Abel has called this a "smoke-and-mirrors" exercise amounting to a hidden rates rise.
The meeting also saw Water Pressure group spokeswoman Penny Bright speak against the increase at the public forum, before being forcibly removed from the chamber and taken away by police.
Mr Hubbard said the alternative to yesterday's vote would have meant cutting the dividend year after year, a loss of some $200 million to the council.
He said he would promise voters at October's local body elections to keep raising water prices to pay this dividend. Dr Hucker would not rule out promising higher water bills to his voters in Western Bays as part of his re-election bid.
The vote would also suggest that C&R Now and Action Hobson would promise higher water bills in their manifestos after endorsing the 9.1 per cent increase and continuing with the dividend policy that is already costing families an extra $200 a year.
Mr Milne, who has bagged the "left" for big rates increases, refused to say why the three C&R Now councillors who held the casting votes on the issue sided with Mr Hubbard and Dr Hucker.
He said voters would have to wait until November - one month after the local body elections - to find what, if anything, C&R Now would do to stop more prices increases to pay for a dividend.
Councillors at yesterday's finance committee meeting put off doing more work on Metrowater's dividend until November when the first planning meeting for next year would be held.
Finance committee chairman Vern Walsh said it would be wrong in the middle of this year's budget to drop the water price rise because people were making submissions on the basis of a 9.1 per cent water price rise and a 3.6 per cent rates rise.
Who's who
* Metrowater: Auckland City Council-owned water retail company with 142,000 customers.
* Watercare: Sells bulk water and wastewater services to six councils across Auckland.
