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6. Benefits & Issues For Council Involvement

6.1 Benefits for Council investment and support with water enhancement schemes

• Water enhancement development matches Council policy objectives in relation to economic development and therefore is justified as an appropriate use of Council funds.

• Irrigation will allow a more productive use of regional resources. The ability to convert dry land farming to higher yielding activities, such as dairying, horticulture etc. maximises productivity for the region.

• Supporting larger scale water enhancement allows Council to better manage their scarce resources (water) for the greater community, rather than ad-hoc private micro development jeopardising a greater regional benefit.

• More intensive farming (requiring more labour) will lead to population stabilisation or even increasing population in the rural communities. This provides social benefits to the community, i.e. secures school roles, medical and other community services.

• New water enhancement development will encourage new business into the region by creating a demand for support services to the industry.

• The increase in population assists existing business to grow and thrive i.e. in the retail and service industries.

• Certainty and stability of water resources provides farmers with a more secure basis on which to plan their growing season, which in turn can lead to increased efficiencies and output. Security for farmer leads to security for the community.

• Provides recreational opportunities i.e. boating on lakes and fishing.

• Ability to secure a domestic water supply for the future i.e. as Timaru District Council has done with the Opuha scheme.

• Council would also expect to generate a financial return on the investment.

• Council is able to offer a scheme the following benefits:
  • Support through high-risk feasibility stages.
  • The ability to make schemes more financially feasible by allowing and/or equity funding.
  • Credibility for the project amongst the community and other potential funding providers.
  • Councils’ experience with the management of large projects.
  • The ability of Council to contribute resources i.e. staffing, research and administrative support.
  • Opportunities to capitalise on and create synergies with existing Council assets/infrastructure such as existing raceways, road reserves and access through private land.
  • The ability to enforce water user support through statutory rating.

6.2 Issues for Council investment in water enhancement schemes

Councils need to be aware of and manage the following issues:

• Investment in irrigation may limit Councils’ ability to invest in other economic development projects. Funding is a scarce resource for Councils and needs to be managed across competing demands.

• Scheme requires a "dedicated" project manager who is able to focus on driving the project ensuring that key requirements are met and issues addressed immediately. It is important that political agendas are not allowed to influence project management as this can negatively affect the overall outcome of a development.

• Negative public reaction to the use of public monies for the direct benefit of a defined section of the community.

• Providing funds to these schemes sets a precedent for other industries to approach Council for similar support or investment funds.

• The need for Council to provide additional funds for supporting infrastructure such (i.e. roads and other water treatment facilities) as a result of the development of water enhancement schemes.

• Subsequent to the asset being completed, there may be a community expectation for continuing financial support from Council in the event that the scheme cannot support itself in the future. For example, CCC invested in the convention centre expecting no financial return from the investment, but no further costs either. The centre is generating losses but is now considered a community asset that is required by the city, therefore CCC must provide an ongoing subsidy to keep this facility operating.

• The impact on the social fabric of the community. With irrigation development, market forces effect changes in land uses that inevitably result in changes in land ownership. Large-scale changes in land ownership effects the existing community inter-relationships. Filling of lakes for storage facilities also requires compulsory acquisition of land, which may be traumatic for landowners.

• Environmental impacts which would require ongoing management and monitoring (such as soil testing to ensure the containment of nitrate levels, which are expected to increase as farming intensifies).

• There is high risk associated with a water enhancement investment at the start-up phase of the scheme. This ultimately puts general ratepayer funds at risk.
  
• There is low or nil financial return expected from such investments during the initial years.
  
• Some water users have expressed the view that the bureaucratic nature of Council has resulted in a cumbersome and restrictive approach.

Contact for Enquiries

MAF Information Services
Pastoral House
25 The Terrace
PO Box 2526
Wellington, NEW ZEALAND

Fax: +64 4 894 0721
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