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Auckland City's policy of raising water bills so there is money for stormwater infrastructure has found no supporters among Government officials, Cabinet papers show.
The council last year ordered its water company, Metrowater, to put up water bills in order to provide a dividend of $280 million over 10 years to spend on stormwater.
The new policy has been the main driver for water bills going up 19.6 per cent in the first two years.
Cabinet papers, obtained by the Herald under the Official Information Act, show Government officials believe making water and wastewater consumers pay for stormwater investment does not meet "funding transparency principles".
"If territorial authorities wish to raise revenue for stormwater from their ratepayers, they should do so explicitly and transparently through a targeted rate earmarked for that purpose," the papers said.
The council considered introducing a targeted rate for stormwater in the 2005 financial year but "deferred" the matter.
Shortly afterwards, officers switched their attention to raising water bills to pay for stormwater. This freed up "rates revenue to address priorities in other areas".
The Government officials were responding to a proposal by Auckland councils to take profits from the region's wholesale water and wastewater company, Watercare Services, to spend on stormwater investment.
The proposal is identical to Auckland City's policy of taking profits from Metrowater.
Following the Cabinet paper and a subsequent letter from Local Government Minister Mark Burton critical of taking profits from Watercare to fund stormwater, councils in the region dropped the idea.
Auckland City refused to budge on taking profits from Metrowater to fund stormwater this financial year but has promised to review the policy after the local body elections in October.
Mayor Dick Hubbard is promising voters at the elections to keep raising water bills to fund stormwater.
His main mayoral opponents, including John Banks and Alex Swney, and the City Vision ticket have promised to stop using Metrowater as a "cash cow" for stormwater.
Committee awaits audit
The parliamentary select committee looking into Auckland City water prices is hoping to report back next month.
Local government and environment select committee chairwoman Steve Chadwick said they were waiting to hear from the Auditor-General's office, which was auditing all councils' 10-year financial plans.
She said the committee had asked the Auditor-General to raise questions on its behalf with Auckland City and Metrowater and expected the answers at the end of this month.
She said the committee wanted to write and table a report to Parliament "quite quickly". The Government then has 90 days to reply to the issues and recommendations in the report.
