CRAG Terms of Reference
The Council approved, in principle, the introduction of water meters and volumetric charging as a water conservation tool, as a way to avoid risks of breaching resource consents, as a way to avoid unnecessary investment in water supply infrastructure and to achieve a greater equity in what people pay for water services.
During 2011/12 Council developed the charging formula to be used based on the advice of the Charging Regime Advisory Group. The decision to proceed with water meters and volumetric charging was made in November 2013 and charging was introduced in July 2014.
Purpose of the Charging Regime Advisory Group
- To develop and recommend a draft volumetric water charging formula for introduction in conjunction with residential water meters;
- To undertake on-going monitoring of the pricing and charging for water by Kāpiti Coast District Council.
Scope
CRAG had the responsibility to develop a draft volumetric charging formula for water which can be applied to both residential and non-residential properties using the following reticulated water supply.
CRAG was provided with technical support to gather data, explore, develop and test any charging model or formula, prior to recommendation to Council. This will include the provision of independent external expert advice commissioned for the Group on charging systems, or any other necessary analysis. There was opportunities for members of the community to provide ideas on charging regimes into the work programme.
Framework for Development of Volumetric Charging Formulae
The CRAG, in discussing and arriving at any advice on a draft formula worked within the following framework:
- water charges must provide revenue for all existing and new costs of the water service activity (Note: this does not and cannot include any costs associated with wastewater services);
- in finding a balance between fixed (if any) and volumetric charges, there is sufficient incentive available from volumetric changing to effect behaviour change;
- impacts on small and larger households, in terms of fairness (horizontal equity) and social impacts (vertical equity) are considered and explicitly addressed;
- the charging regime must be capable of being applied across all geographic communities on reticulated supply and all sectors (e.g. residential and commercial)
- fairness of impacts on reasonable and high users of potable water are to be explicitly addressed
- that particular characteristics of the Kāpiti Coast are provided for in the design of the charging system, in particular:
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- be capable of annual adjustments to charging to address fluctuations in consumption;
- links to the water by-law in terms of landowner responsibilities and to the rating policy in terms of hardship provisions;
- satisfy Council’s annual cash-flow requirements;
- not impose unreasonable administration costs.
Membership
- Chair: Mr Don Hunn
- Grey Power: 1 member
- background in financial skills: 1 member
- community interests and low income households: 2 members
- Chamber of Commerce: 1 member
- landlord interest: 1 member
- Council: 2 Councillors
- Iwi: up to 3 representatives
All members were ratepayers or residents of the Kāpiti Coast District.
Processes and support
the CRAG:
- meet regularly with meeting times structured to enable the Group to provide timely comment and advice to Council at each stage;
- be provided with all reports and technical data within timeframes that allow robust advice to be provided to Council staff and Council;
Council:
- reimbursed members’ travel costs arising from participation in the CRAG;
- provided all secretarial support;
- provided a project management support to advance necessary technical work and follow-up between meetings actions;
- commissioned an independent expert advice on behalf of the Group, including peer review processes. The latter may include seeking input from other Councils with experience in water meters and volumetric charging.