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Water Services National Training Group. 10 th Annual Conference 7 th September 2006. Water Services – Funding Non-Domestic Capital Contributions. Jack Keyes County Manager Cavan County Council. Strategic Issues. Balanced Regional & Local Development Increasing Population
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Water Services National Training Group 10th Annual Conference 7th September 2006 WSNTG Annual Conference September 2006
Water Services –Funding Non-Domestic Capital Contributions Jack Keyes County Manager Cavan County Council WSNTG Annual Conference September 2006
Strategic Issues • Balanced Regional & Local Development • Increasing Population • Political / Business / Farming • Government / Local Authority Finance • Efficiency of Delivery / VFM • Partnership between Central & Local Government WSNTG Annual Conference September 2006
Summary of Main Effects - Financial • Significant effect on Local Government Financing • Borrowing (Quantum / Approval) • Risk • Cash Flow / Overdraft • LGF Fund • Price/Dev. Contribution Increases • Social / Affordable • Rates Income WSNTG Annual Conference September 2006
Socio Economic Planning • National Spatial Strategy • “To strengthen establishments of structured villages & small settlements” • “Alternative for those wishing to live in rural community” • Sustainable Rural Housing Guidelines • “Development of towns & villages… attractive & affordable housing options” • Regions currently lagging WSNTG Annual Conference September 2006
Political • Farming • Business – IBEC / Chambers Ireland WSNTG Annual Conference September 2006
Chambers IrelandWater Service Charges for Business 2006 Recommendations • Local Authorities should charge all water users • Compulsory metering in planning permissions • Reduce commercial rates in line with full cost recovery • Agree increases above inflation with business & farming community • Transparency (including all contributions from business community) • Increased funding of local government including a move to locally based sources • Charge all for everything WSNTG Annual Conference September 2006
Typical Small Village WSNTG Annual Conference September 2006
Incentivisation of water users • Regulatory framework • Shared services / national and regional bases • Structural & Informational charges (audit committees) • Ongoing review of local authority services (DPG’s and water) WSNTG Annual Conference September 2006
Chambers Ireland - Findings • Metering target end 2006 will not be reached by 11 Councils • Variation in costs for metering (zero to €680/annum) • Consolidated charges varying from €0.77 to €4.55 • Current expenditure of water services increased from 11.53% to 13.4% of overall revenue expenditure • Current income from water charges varied from an average of 3.64% to a maximum 6.51% of overall expenditure WSNTG Annual Conference September 2006
Water Services Investment Programme 2006 - 2011 Water = € 64.9 million Wastewater = € 55.7 million Total = €120.6 million Council contribution = € 36.9 million Funding Source – Development Levy Water Charges Financed by – 20 year loans WSNTG Annual Conference September 2006
Capital Repayments 20 Year Loans at 3.5% WSNTG Annual Conference September 2006
Impact On Rates WSNTG Annual Conference September 2006
Funding • Water Charges (50%) = €29.3m • Development Levies (50%) = €29.3m + Small Schemes Contribution + Serviced Land Initiatives WSNTG Annual Conference September 2006
Water & Wastewater (m3) WSNTG Annual Conference September 2006
Water & Wastewater Development Levy WSNTG Annual Conference September 2006
Possible Responses Of Local Authority • Cease development of small towns & villages • Cease development of certain larger conurbations • Adopt shorter design periods / modular approaches • Significantly increase development charges / water charges in under developed regions WSNTG Annual Conference September 2006
Also could: • Improve efficiencies, systems and VFM approaches • Increasingly involve private sector/other delivery mechanisms as appropriate • Improve transparency / dialogue with business & farming interests • Develop shared services approaches • Incentivise customers WSNTG Annual Conference September 2006
Future Challenges • Water services runs like a business • Enhanced technical and management excellence (25% UFW/PPP’s) • Attitudes and systems re-aligned • Consistent and comprehensive cost centres (e.g. building depreciation) • Profit in all but name • Better mobilisation of Regional & National Networks • Deepened partnership between DEHLG & Local Government WSNTG Annual Conference September 2006
Clarity of Integrated Strategic thinking at Central Government Level • Increasing population • Consistency of approach to water pricing • Borrowing CAP • Funding of Local Government • Linkage with River Basin District Management WSNTG Annual Conference September 2006