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East Rotoiti Sewerage Cost Rises to $56m

18 March 2024

Projected cost of Rotoiti East/Rotomā Sewerage Scheme

Have Your Say!

Late February 24 Stavros Michael, GM Infrastructure & Environment & Primary CDEM Controller for Rotorua Lakes Council, provided us with an informative update on the status of the East Rotoiti/Rotomā Sewerage Scheme. You can read Stavros Michael's letter here. You can have your say here

Projected cost to Property Owners

The important news for East Rotoiti Property Owners is that the total projected cost of the scheme - based on the then only concept plans and not factoring in forward inflation and regulatory compliance with the consent conditions that were unknown at the time - has now risen from around $35m with 30% uncertainty in 2014 to around $56m today. As a result of this the cost per property owner has risen from around $14k in 2014 to possibly around $30k per property now.

This is calculated as follows: $56m less $35.734m funded by Funding Support Sources equals $20.27m to be covered by property owners. By June 24, 600 of the existing 650 properties are expected to be completed. The capital costs will be spread across 770 properties meaning the cost per property will be around $26k and with Gst added will become around $30k cost to the property owner. Confirmed by RLC here.

Owners are expected to have the choice of paying the final cost up front or taking up a 25 year Council funded loan, (including interest understood to be around 6% currently which approximately doubles the cost), which would be repaid via periodic rate demands.

External Funding of Scheme

The around $36m coming from external funding anticipated currently, subject to final Long Term Plan decisions, is expected to come from:

* Ministry of Environment - $11.5m - RLC have applied to MfE to increase this by $10m to meet inflationary costs since approval of the original Deed Funding. MfE are presently considering a transfer from the BoPRC Incentives Scheme fund as a loan only, to be reimbursed by RLC via the existing Lakes Enhancement Rate.

* Rotorua Lakes Council - $10m - Recently approved by Council as an increase to the existing Lakes Enhancement Rate IF the additional funds applied for from MfE (see above) are not forthcoming.

* Ministry of Health - $4.46m - Support to help with drinking water issues in this lake

* BoP Regional Council - $8.62m - In support of lakes water quality goals and East Rotoiti community high deprivation status.

* Rotorua Lakes Council - $1.16m - Standard subsidy ($1500 per/property * 770) Council is considering raising this level as part of the LTP process.

Confirmed by RLC here.

Elected Councillors will make the Final Decision On Cost to Property Owners

It is important to note that the final cost to property owners will be determined by the elected councillors as part of the Rotorua Lakes Council Long Term Plan to be finalised by the end of June 2024.

The timeline for the development of the Rotorua Lakes Council Long Term Plan, (LTP), is:

* February 2024: Draft consultation document audited

* March 2024: Council to adopt consultation document

* April 2024: Community consultation on proposed LTP

* May 2024: Hearings and deliberations

* June 2024: Adoption of finalised LTP

LRCA’s Position

LRCA intends to represent the views of our community strongly in the LTP plan process to achieve the best outcome we can for our community. We will be working with Ngati Pikiao and the Lake Rotomā/Rotoehu Community Association on this initiative.

We have a number of concerns around the following issues in no particular order:

* The affordability of the capital cost of the scheme will be unaffordable for many members of our community, particularly the elderly and retired. * Most property owners will have consented to the scheme expecting a cost close to $14k

* It is unclear whether costs to property owners have been quoted with or without Gst. Most will have understood mistakenly that any cost quoted included Gst.

* Should property owners be expected to cover substantial increases in the cost of the project when they had no control over these costs?

* The East Rotoiti community’s contribution to the urban Rotorua community’s rates substantially outweighs the per capita benefits they receive. It would seem reasonable for the wider Rotorua, Bay of Plenty community to contribute significantly for this lakes water quality initiative which will substantially benefit the wider community for the next century.

* We question whether there were not elements of the project which we could have expected to be managed better yielding a better outcome for all involved such as:

. * The initial consultation exercise which if managed better would not have required the Environment court to be involved and the project to be delayed and substantially rescoped resulting in many of the downstream cost increases.

* The Maori land issues at Rotoiti should have been anticipated and could have been resolved earlier in the projects timeline substantially reducing the current delays.

* Could the 3 Waters funding sweetener not have been used to reduce the burden of the cost overruns on the council and the affected community?

* Better management of the council supply contracts to reduce the cost overruns

Play Your Part to Achieve the Best Outcome

You can help us with our submissions by by completing the questionnaire here, and making submissions to the LTP when the Council enters its consultation phase in April. By completing the questionnaire you will be adding important weight to our community negotiations with council and to our submissions.

Also please do your best to have your say at the Rotoiti Council community consultation meetings on the LTP scheduled at:

* Pikiao League Club, 5.30 to 7pm Tuesday 9th April

* Rotoiti Sports Club, 6.00 to 7.30pm Monday 15th April

We thank you for your support in advance.

LRCA East Rotoiti - Rotoma Sewerage Scheme Sub Committee.

Stop Press - RLC have just issued their March 24 Update on the Sewerage scheme

You can read it here.