–Martin Luther King Jr.

as recommended by Steve Kirsch

“Why are there no public debates on whether the covid so-called ‘vaccine’ benefits out weigh the risks?”

This is the question asked at the start of the first film.

That’s an easy one. Because none of the advocates of the vaccine are willing to debate anyone who disagrees with them.

https://twitter.com/FlexFilmsTV/status/1819827423636234504

https://twitter.com/AubreyMarcus/status/1785337267210293350

John is on the committee of Concerned Ratepayers Kapiti

Paekakariki. Kapiti Coast 5032

22 March 2025

To:

The Commerce Commission
Wellington 6140
New Zealand

The Office of the Minister for Local Government of New Zealand 

Simon Watts –  Simon.Watts@parliament.govt.nz; 

Water Services waterservices@dia.govt.nz; contact@comcom.govt.nz; wai@comcom.govt.nz; 

Dear Commerce Commission and Minister for Local Government Hon Simon Watts.  

RE: Economic Regulation of Water Services — Information Disclosure presentation for the proposed Local Government Water Services Bill 2024  coming into force on 1 July 2026 

Please refer to Appendix 1 for a Glossary of Terms, Abbreviations, legislative and local body Links.

Table of Contents

A. Background 2

B. Flaws, Omissions and Errors in the Bill Draft and ComCom as it currently stands 4

B.1 Commerce Commission – selective analysis 4

B.2 Legislation clause by clause – selective analysis 14

C. Recommendations summary and Conclusion 26

Appendix 1 : Glossary of Terms, Abbreviations, acronyms, legislative and KCDC local body Links 29

Appendix 2. Case Study – Kapiti Coast District Council 31

Discussion on the disclosure  of KCDC Three Waters Debt allocation being made under the new Water Services Transfer 32

This communication while regarded as a submission response is referred to the Commerce Commission’s Economic-Regulation-of-Water-Services-Information-Disclosure-Discussion-Paper-February-2025 as a constructive critique focusing on the Financial Accounting information disclosure requirement under the WS Regime with the following aims:

• To itemise the need for democratic, transparent financial disclosure of the Water Services delivery mechanism as authorised by the upcoming  Local Government (Water Services) Bill 2024  108-1  coming in to force 1/7/2026.
• To point out the need for compliance with the following acts as itemised in the schedule  New Schedule 7 Commerce act 1986     
• To point out the flaws and omissions in the legislative drafting affecting and hindering transparent information disclosure  [ ID ] are being promoted by ComCom  
• Provide experiential and researched constructive advice on how the ID may be improved
• Disclose the areas where consumers are not protected currently nor in the proposed bill and principles of Ratepayer Equity and Fairness of treatment concerning the Three Waters rating differentiation and whether a i.e. fixed volumetric charges vs the current cross subsidised  rating model complies with the requirements of the various Acts involved  
• Provide a case study examples of Water Services past, present and future using Kapiti Coast District Council [ KCDC ] as the subject, for this is the TA the Respondent resides in as a Rural Ratepayer.    
• Provide Recommendations in green text centred around sound financial accounting principles that do not transgress or allow any illegal charging for unperformed services under the Fair Trading Act 1986   in other words to be clear – 
• This legislation should not over ride  the Fair Trading Act 1986 or the law of Contract 

The Respondent requests to be heard and present this in person at Public Hearing if that process is allowed by the Commerce Commission, and requests advice of the date, time, and place in Wellington if these are to be held.     

A. Background

The Information Disclosure requirements of the Proposed Bill:

“the Bill is to set up a new regulatory framework for water services delivery. The Bill provides for—

arrangements for the new water services delivery system; and

a new economic regulation and consumer protection regime for water services; and

changes to the water quality regulatory framework and the water services regulator.”

…to provide water supply, wastewater, and/or stormwater services”

ID disclosure of the Ownership and delivery model and accounting for same:

The information  Disclosure requirements of the Commerce Commsion cannot be separated from the Local Government (Water Services) Bill 2024  reporting requirements.  

The major issue presenting here is that this bill is not yet law, it is still in select committee phase, has not taken into account public submissions, has not had a second reading and has not achieved Parliamentary Assent.  

Local Body TA’s across New Zealand have been given a contradictory instruction to go out to public consultation on legislation not yet passed.

To be fair on the TA’s they can only comply with the current law  [ i.e. Bill 1 and 2 and the  Water Services Preliminary Arrangements Act 2024   

This has differing requirements to the extent that KCDC have been instructed to comply with this Act and not the un-assented act currently before Parliament. This has resulted in an ill-formed public Consultation document being put before the Kapiti Rate Payers and has not allowed the KCDC executive to present all options in a fair and unbiassed manner, Furthermore that consultation put forward by Morrison Low has a number of embedded flaws and mistakes in it that have been brought to KCDC’s attention by the Respondent.     

The response  attempts to combine the Reporting, and Information Disclosure  requirements of the new Bill with the brief put forward by the Commerce Commission. 

 Water organisations may be owned by local authorities (territorial authorities and regional councils) CCO’s,  or by the trustees of consumer trusts. Local authorities and trustees of consumer trusts may own a water organisation either as the sole shareholders, or as joint shareholders.

The question of a proposed water service organisation’s  legal ‘ownership’ of ratepayer fully funded water services assets is not addressed in this presentation.

It is assumed that all Reporting and Information Disclosure requirements will be treated equally in compliance with all the possible options of the Water Services delivery model:  

Water services are to be provided in its district through one or more of the following means:

• providing water services itself directly by the TA :
• transferring responsibility for providing water services to a water organisation (through a transfer agreement):
• contracting with another party to provide water services on behalf of the territorial authority:
• entering into a joint water service provider arrangement:
• entering into another type of arrangement (other than a franchise or concession agreement).

It appears that from the proposed Bill a User Pays system of Water Services service delivery is to be adopted, but this should be stated explicitly in the legislation and within ComCom’s ID requirements.

ID Disclosure Recommendation:

Cross Subsidisation of Water Services expenditure both CAPEX and Opex from non water services rating collections should be explicitly exempted or forbidden in the legislation wording but should be reported on if TA’s attempt to continue doing this under the new regime.       

The water services organisation and delivery mechanisms is a facilitation function only

Whichever type of organisation and delivery model is chosen the following must be adhered to:

• Ownership of the title to, and physical Water Services Assets, must remain in Public hands in perpetuity and be available for reporting to them explicitly, and there must be provision in the legislation to prevent any subsequent Government legislation or TA from transferring ownership of shares, trustees, shareholders, financial interests into any subsequent private ownership, parent company or financial arrangement that may remove the right to public ownership and control.   
• The most cost beneficial User Pays model should be adopted  and the ongoing reporting performance of this be reported to the ratepayers along with cost beneficial comparisons with all the other waters services delivery models across TA’s in New Zealand.   

B. Flaws, Omissions and Errors in the Bill Draft and ComCom as it currently stands

This bill is extremely large, complex in nature with far reaching effects on associated legislation. 

Likewise the Commerce Commission material  in the discussion paper is highly summarised and of a general nature 

B.1 Commerce Commission — selective analysis  

Specific exceptions and comments related to the Commerce Commission’s ComCom WS -ID -Discussion-Paper-February-2025.pdf

1.22 Page 8 

“❖ are limited in their ability to extract excessive profits “

The respondent requests that all reference to “profits” be deleted from the foundational ID as set out under the WSPA Act. For following the reasons –

The purpose of the Water Services entity is NOT to make a profit – it is simply a facilities service cost recovery paid for by water rates from the ratepayers. A dividend should NOT be payable to any private individual, ratepayer, or shareholder or trustee or any related party entity to a TA. Any surplus, should that occur will be reinvested back into the operating budget or used to pay off Three Waters Debt. 

1.23 Page 9 

..”we are seeking outcomes in the water services sector that are consistent with the outcomes of competitive markets,…”

The allusion or analogy of a PBE public good benefit i.e. provision of water services as a fundamental to human life as a comparison to a competitive market is entering dangerous territory. It is suggested that ComCom reword this.

1.25 page 9 

“Prospect of further regulation”

The industry is already and will be heavily regulated in this regime with no less than eight “governing”  bodies :

• The new chosen TA Service provider and Delivery Organisation 
• ComCom
• DIA
• MBIE
• Te Arowai – Te Maori Water Services Authority – Taumata Arowai
• WC – Water Care
• WNZ – WaterNZ   [is under stood being paid by industry subscribers not ratepayers] 
• WS – Water Services 

It is suggested that further regulation be limited. 

1.26 Page 10

Its not just the Commmerce Commission that defines all the ID and reporting requirements it is done hand in hand with all the other legislative functions contained in the allied Acts. 

i.e. a joint and several responsibility, it should be considered that ID disclosure and Reporting should not be duplicated across all the agency actors enforcing compliance.

1.27 Page 10 

“in aspects of the information disclosed. Potential stakeholders interested in ID for water services” 

All the interested parties in table 1.2 should be treated equally with no discretionary information with held from any of the respective groups.  

i.e. including the following :

• Quality—service is provided at a quality that reflects what consumers might reasonably expect. 

• Pricing—prices represent value for money and encourage efficient use of water resources and infrastructure. 

• And not be charged for three waters services they cannot, and do not receive
• Not be double charged via cross subsidisation
• Not be double charged via blanket district wide General rating levies

• Investment—investment occurs on the right things in the right place at the right time.

• Efficiency—spend is minimised while still meeting investment and regulatory requirements. • Sharing efficiency gains—benefits of efficiency gains are shared with consumers, including through lower prices. 

• All profits or surpluses to be returnd back to the operating expenses or used to reduce three waters debt.
• No ratepayer , director , shareholder , trustees or other services provided by a TA should receive any efficiency surplus – see the former statement

• Innovation—appropriate innovation occurs. 

• Limiting excessive profits—an appropriate economic return over time is earned.   – refer previous comment under 1.22.

2.5 page 14

It would appear that KCDC by its pre-emptive choice to retain the in-house business unit model that it intends to circumvent any requirement to comply with the ring fencing  defined in the main WS Act and ComCom’s own ID regime.

” . It may also include an additional outcome relating to ring-fencing, that is, that revenue received from the provision of water services must be spent on those services.  The LGWS Bill would also allow us to include ID requirements relating to consumer protection…”           

The consumer protection aspect of the ring fencing is not defined well enough to be enforceable, this need attention.  

2.8 page 15 

“.. how the water service providers assess the condition of their assets in addition to knowing what condition the assets are in. …”

This is an extremely subjective statement  and should be amended to include objective third party industry [ arms length ] assessment of how these water services assets are valued / and or transferred based on independent  verification outside of the TA or WS provider. 

In KCDC’s case they have progressively and systematically revalued and inflated the value of their water services assets as disclosed in the case study. 

They refuse to make these re-valuations public despite numerous OIR requests.    

The Respondent agrees entirely with the requirements of:

Table 2.1 page 16 

“ Possible questions that stakeholders may be interested in asking”

However with the addition that the ring fencing reporting should show which WS assets and operating costs are being directly charged to the WS users who are actually using them and also show which WS assets and operating costs are being cross charged or subsidised by users who cannot use them – i.e because they do not have one or more of the three water service connections on their property – i.e they are self sufficient, provide their own water, water and storm management.      

Table 2.1 Page 18 

Financial management 

Does the water service provider have ring-fencing provisions in place, and if so, what are they? 

• This should be compulsory and written in to the legislation 

What are the financial systems that the water service provider has in place to enable the separate financial reporting of regulated water activities?

• This should be compulsory and written in to the legislation 

 What dividend has the water service provider provided to its owner? 

• NO refer previous comment under 1.22.

Has the owner provided any financial injections into the water service provider? 

What plans does the water service provider have to make changes to its approach to ring-fencing and financial management? 

• Any changes should be defined in the legislation 

To what extent does the water service provider engage in related party transactions? 

• Full disclosure and transparency 

What is the water service provider’s approach to managing debt, interest costs and liquidity and how does this affect its investment and efficiency? 

• All publicly disclosed 

Revenue and pricing Revenue

What return has the water service provider been earning? 

– The purpose of the Water Services entity is NOT to make a profit – it is simply a facilities service cost recovery paid for by water rates from the ratepayers. A dividend should NOT be payable to any private individual, ratepayer, or shareholder or trustee or any related party entity to a TA. Any surplus, should that occur will be reinvested back into the operating budget or used to pay off Three Waters Debt. 

What return is the water service provider targeting in the future?

The respondent requests that all reference to  ‘returns” or “profits” be deleted from the foundational ID as set out under the WSPA Act  and LGWS act being the  

Local Government (Water Services) Bill 2024  108-1

Water Services Preliminary Arrangements Act 2024

 Pricing

 What is the structure of charges or rates component? 

• General ? and
• Targeted water rates? 
• Overheads ?
• Other WS charges ? 

What rationale is the water service provider using in setting the structure of charges?

To what extent do customers understand the structure of charges and their bills?

Is the water service provider aiming for its charges to be as cost-reflective as is practicable? How does it plan to achieve this? 

How do charges compare against efficient pricing principles? 

To what extent does the water service provider charge development contributions for growth and what proportion of the total cost of growth are these contributions?

• The Respondent fully agrees with the above seven points being transprently disclosed fully 

Table 2.2 Page 20

The respondent fully agrees with the five categories, and would add the Ring Fencing requirement  to show the application of water services costs being fully recovered from those water services users who actually use them, and disclose if there is any cross charging or subsidisation by other general rate users including those who do not have the three waters connections and therefore cannot use them.   

See:

 Cost allocation: Allocation of costs between the regulated water service provider and other purposes (eg, splitting cost of an office or vehicle that is used for the water service provider as well as other council activities) “

This does not just apply to vehicles

 But all of the following

• Interest on water services long tem debt whether ring  fenced or not
• Water services council overheads comprising
• Water services District wide Planning, Governance , Policy 
• WS Iwi consultations,  Iwi capacity building  and development relating to water services
• All WS staff costs — operational and asset management 

Finally, most  important to demonstrate how all the remaining TA Council costs and services cost have been REDUCED by the removal of ALL the Water Service components.

It is clear from the KCDC situation that they plan to not reduce any of the existing  costs and  charges.

Please note:

KCDC ‘frontloaded’ all Kapiti ratepayers from July 2024 with a compounding increased rating levy of  greater than + 7.3% for the next ten years accumulatively [see OIR 2324-839] with the full knowledge in 2023 that a new ‘Three Waters’ – LWDW  would be split off, i.e. that the 7.3% surcharge would still be recovered and in the bank for each of the next ten years by the entire rating RU base?

Under the new regime that 7.3% rating levy surcharge should be REDUCED from the entire general rating base as these charges are also being claimed under the new Water Services process from 1/7/2026.

Does the Commerce Commission acknowledge and perceive how the Kapiti ratepayers have been financially misled with this intentional double counting by the KCDC executive?   

Page 21

Feedback prompts – 

Understanding performance and information requirements 

1. What are the top two or three things you want to understand about water service providers’ performance in the short-term (in the context of the purpose of ID outlined in Chapter 1)? 

2. Are there any additional performance questions (Table 2.1) that you believe should be added and why? 

3. Are we missing any types of information (Table 2.2) that you think are needed to answer the performance questions we have posed and why? 

4. Are there any areas that you think are the most important to ensure comparable information between providers?

Table 2.2 page 21

..” 1. What are the top two or three things you want to understand about water service providers’ performance..”

Honest Transparent, Equitable charging that does not contravene any of the legislation involved – Contrary to what KCDC does currently that no external agencies are prepared to recognise.      

..” 3. Are we missing any types of information (Table 2.2) that you think are needed to answer the performance questions we have posed and why?”

• Is the economic regulatory model to assume that all water costs will be met through volumetric water charges? And what is the regulatory model guidance and boundary about ensuring that such user charges are kept to an appropriate level? 
•   The Commission’s material does not appear to address the regulation of a hybrid funding model of part Water user charges and part General property rates? In the case of KCDC it appears they intend to continue with the cross subsidisation  / hybrid model of delivery and both the Act and ComCom are silent on this. Please address this issue
• If a cross subsidisation /  hybrid funding model is chosen will this be consistent with the proposed economic regulatory model? And how would the Commission go about its economic regulatory role in this case? How would ComCom determine what pricing, charges and governance would be deemed equitable for 

• the users of the water services?
• the general ratepayers  who are also being [double] charged directly for water services, via the general district wide charges? and
• the general ratepayers who cannot use the Water Services because none of them have the three connections  and the TA  cannot provide them but these ratepayers are still the target to pay for the cross subsidisation of services ? this would appear to be in contravention of the Local Body Rating act 2002, the Fair Trading Act, the Commerce Commission regulations and any future regulations under the new Water services delivery regime?
• finally how would the Commission  determine and decide on whether the level of costs in a cross subsidised hybrid model are appropriate?

3.3 Page 22

..” take account of water service providers’ existing practices and capability”

It would be advisable to call TA’s to account for their current practices – in the case of KCDC, to rectify the misrepresentation, misappropriation and unlawful activity regarding its management of the existing three waters services.

The water sector stakeholders are primarily the Ratepayers – they and only they are ones paying for this regime. Please keep this uppermost in the treatment of these stakeholders. 

3.5 page 22

Regarding “Water Service Delivery Plans. This may mean that some water service providers are limited in what information they can provide —

These should be standardised across all TA’s and all water service delivery providers – 

“one law to rule them all“ — with no exceptions.

Please, the Respondent asks that no preferential treatment be excepted  / accepted for those water service providers  [or Iwi] who claim they do not have the information or staff — they actually do.  

KCDC spend upwards of  $2.5M per annum on Iwi “Capacity building” or “capacity development“ and associated grants to provide such resources while all other ethnic  and ratepayer groups are ‘noted’ but  granted no ‘consultation’ monies.

3.6 Page 23

“..As outlined in paragraphs 1.28 to 1.31, in addition to getting feedback on this discussion paper, we also intend to get stakeholders’ views through consulting on any draft determination and through running targeted workshops (if needed)..”

The Respondent highly recommends following through and executing this intention by the Commerce Commission.

It would be advisable to invite the myriad of Ratepayer Groups , stakeholders all over New Zealand to participate.  This would provide far better feedback to ComCom regarding the ‘state of the nation’ in relation to water services.   

3.7 – 3.8  page 23 

Appear to be unfounded and ill-formed in the document, this needs elucidation

With the rationale of why exemptions should be granted to some, but not to others?

By circumstances, factual reasoning – this should be struck out.  

3.8 – 3.10  Page 23

Methodology, definition, and parameters of measures needs to be stated, clearly

 – This is a very general ‘waffley piece of woke’ by ComCom — apologies, but not acceptable to the Ratepayers paying the bills to fund this.

3.14 page  24

..” We have a memorandum of understanding with the Water Services Authority – Taumata Arowai, which sets out how we will work together.29 We are already working closely together to minimise regulatory burden.” …

Can this please be made public, the question of regulatory burden is excessive in the current situation as previously made clear elsewhere in this document there are too many agencies ‘clipping the ticket’  on the water flowing under the legislative  bridge being –

• The new chosen TA Service provider and Delivery Organisation 
• Commerce Commission
• DIA
• MBIE
• Te Arowai – Te Maori Water Services Authority – Taumata Arowai
• WC – Water Care
• WNZ – WaterNZ   [is under stood to be paid by industry subscribers not ratepayers] 

Page 27  below table 3.2

“.Feedback prompts – How to make the ID regime cost effective 

5. Is there anything else we should be doing to help keep down the costs of the ID regime? 

Reduce excessive bureaucracy, reduce duplication,  the source TA’s are the prime source of the ID information.   

6. What do you think are the key differences between providers and how could providers be grouped based on these differences? 

This is not a well formed question, there is WaterCare primarily for Auckland, the rest of New Zealand is so geographically dispersed that the Castalia report on Scottish Water [WICS ] proved was not applicable   

7. Are there any other ways you think we should engage with the water sector to get technical input? 

Transparent, public good, old fashioned honesty, unfettered by profit centered pecuniary gain.   

8. Is there anything else we should do to minimise the impact on providers of working in a complex regulatory environment? 

Reduce the complexity of the regulatory environment. 

9. What do you think are the most important obligations from other agencies for us to consider when developing an ID regime? 
Which other agencies? , the question is too open to be meaningful?

The law is the law, the OIA, LOGOIMA process is severely compromised as Peter Boshier recently pointed out.

The current OIA, LOGOIMA regime does not support the timely resolution of the information they are purporting to disclose.

This makes it extremely difficult for 

• Ratepayers
• Ministers
• Water service providers
• Government agencies

To get exact information quick enough to facilitate transparent, equitable and fair responses order to be able to begin a process of fair treatment.       

10. What are the characteristics of information that you think are most important to the success of an ID regime?

Honesty, transparency, equity, fair mindedness, unshackled by any woke, leftist agendas.

3.24 – 3.25  Page 28 

…” In other sectors we regulate, we require suppliers to obtain assurance (such as audits) on the information they provide through ID. This is to ensure that the published information is an accurate reflection of the performance of the suppliers….”

The question of the refusal  of the Auditor  General, John Ryan to even acknowledge, respond to, or consider the correction  the KCDC Water Service anomalies  reported by the Respondent as lodged beginning 8/10/2024 and updated since raises some question of competency of this agency.  

3.29 – 3.31  page 30 

“The WSPA Act enables us to exempt public disclosure of commercially sensitive information so water service providers would only need to provide confidential information to us. 33 We may publish analysis based on that information or publish aggregated information”  

There is no issue with the preservation of private security around digital cyber systems and cyber security   – however the distinction must be drawn as to the context of financial disclosure, often  the term ”commercially sensitive” is  used by TA’s to obfuscate or deny the disclosure of ratepayer paid for information  to deflect inquiry to with hold details of council spending.

The definition of financial boundaries, or what actually constitutes ‘commercial sensitivity’ need to be addressed here by the Commerce Commission.       

This is a Public Good situation, not a private profit biased government agency cartel.

The TA’s are PBE’s their role is NOT to make profits, they are a facilities cost recovery model paid for by the ratepayers.   

With regard to the ComCom Technical Working paper on the Accounting basis of reporting

Item 6 Page 3

Statutory accounts based on generally accepted accounting practice (GAAP) include standard reports like Statements of Financial Performance and Position. We will need to consider the extent to which these existing types of accounting reports help meet the intended purpose of information disclosure to decide whether we should require them. These MUST be provided  

Item 8 page 4

…” we might determine the use of specific approaches when there is a choice under GAAP, or where we consider that deviating from GAAP is required to support regulatory objectives..”

It is not appropriate to deviate from GAAP in order to ‘support regulatory objectives…’

That does sound just a little totalitarian!     

Item 9  page 4 Accounting basis – capital maintenance  table 1.2

The Operating capability maintenance (OCM) method is the preferred option 

FCM is not applicable or warranted  under the Water Services model.

Water services are a unitary PBE cost recovery model  for public service facilities  paid for by the

The ratepayers 

It should not have profit centric outcomes.  

Item 12.1  page 5

TA’s would never treat valuations as income [ comprehensive or other wise ] nor are historic costs desirable. For example KCDC has chosen to artificially inflate the  valuations of its assets so that it can accommodate an ever increasing debt ‘headroom’ capability. 

This will not change under the  Water Service regime, they have in fact been preparing for this over the past three years so they can have the capacity for taking on higher debt levels contrary to their public statements.   

KCDC have never rates funded depreciation, it has been claimed as an expense in the profit and loss statement  but never rates funded the cost of units in use or depreciation since the Respondent first raised this issue with the KCDC executive in 2005.

Item 14  page 7

Because of KCDC’s practice of over valuing its assets, this discussion  is largely academic and impractical in reality.

The original three water proposals with the previous Labour government failed because of KCDC’s excessive over valued stance, acknowledged by the Mayor  and witnessed publicly.     

B.2 Legislation clause by clause — selective analysis  

This Legislation must be for the public benefit for a service delivery / service cost based model. It should not be the prerogative of the bill to seek profits or dividends from a core ratepayer service function for a necessity of life i. e. Water, Wastewater and Stormwater.

It is clear from the way the bill has been drafted that it is quite an authoritarian capitalist profit centric model that is being proposed.

This is not acceptable for a community-based common good activity.

All the TA’s are defined as PBE’s at the service of their ratepayers not the other way round.

The Bill’s General Policy Statement:

Because of the etymological complexity,  volume and legal meanings  of the proposed bill’s wording these reporting ID flaws omissions and errors are highlighted in bold red so the that the Commerce Commission  readers may easily recognise quickly what needs to be addressed.  

The choice of Ownership vehicle does not state any safeguards to maintain the retention of public ownership in perpetuity as referred to above. 

The Bill totally ignores any definition or quantification of equitable Financial Valuation of the Water Services Asset, the Transfer of Assets to the new entity and how that is to be measured and assessed in equity to all ratepayers both those on town supply or those rural ratepayers who cannot benefit from the water services rating differentiation under this proposed split. 

 The Bill totally ignores any definition or quantification, guidelines, benchmarks “check and balances”  regarding auditability, the audit function   and how equity is to be maintained and reported upon. 

This needs to be corrected.   

Subpart 2—Reporting

Subpart 2 sets out a requirement for a water service provider to adopt a water services annual report.. and 

A water services annual report must include the information set out in Schedule 4 and a report by the Auditor-General. ..”

Subpart 4—Financial matters

Subpart 4 sets out various financial matters, including the following:

a water organisation must generally ensure its projected operating revenues are sufficient to meet project operating expenses; and

a water organisation may borrow in currency other than New Zealand currency;

But the Bill does not address any debt secured over the Water Services Assets and how security and title to the security is facilitated.  

Part 6Miscellaneous provisions

Subpart 1—Water services bylaws

The principle of charging for Water Service that a TA cannot provide is totally overlooked, KCDC currently do this and this proposed legislation does not provide consumer protection against this for the 4340 self contained rural ratepayers who cannot access the thee waters services and KCDC cannot provide them, due to there being no water connections – incoming or outgoing [town supply or, sewerage]

It would be advisable to ensure the bill legislation adequately protects rural ratepayers  

Under Part 4A

Consumer protection in relation to water services

Sections 57TA to 57X do NOT protect the consumer in terms of cross subsidisation of the TA charging rural ratepayers for WS services it cannot provide to them and the rural ratepayers cannot receive.   Currently KCDC do not report or disclose the extent of this.  

The Commerce Commission is referred to the current situation with KCDC 

Kapiti Council currently recovers by far the majority of Water Services Costs via Districtwide cross subsidised General rating levy water charges at 79% and only 21 % recovery through volumetric  water services charges, as follows:

If the status quo option is selected (it is the Council’s strongly preferred option),  the Council plan to keep the same funding mix – of the minority of water costs met through volumetric charges (water meters) but the majority of costs met through District Wide general rates based on land capital value of ratepayers.

This is clearly inequitable and is raised as an issue for the Commerce Commission to address. Furthermore this issue is exacerbated by the fact that KCDC charge those District wide water services charges to 4340  self sufficient rural ratepayers  who cannot receive those services as they do not have the three types of water connections 

See OIR  2324-933.

This is in direct breach of the Fair Trading Act and is the subject of a separate complaint.    

S57X covers the reporting of the complaint process only, NOT how the overcharging or illegal charging is to be compensated back to the rural ratepayer victim.   

However it would appear that a TA if found guilty of falsely charging a rural ratepayer for water services it could not provide or they could not receive could be fined up to $200,000 under 

(e) prescribing those breaches of the regulations that would constitute an offence under this Act:

 Along with compensation and recompenses of costs to the Ratepayer 

Schedule 4 

Contents of water services annual report

Due to the severity and significance of omissions here the entire schedule is inserted  with these highlighted in red 

General requirements

1Water services annual report: general requirements

(1)

A water services annual report for a water service provider must contain information that will enable a person including a ratepayer who owns the water services assets to make an informed assessment of the water service provider’s operations and performance, including information that—

(a) compares the provider’s intended does “intended” have an extra practical meaning of illegal activities by KCDC ? activities and intended performance levels, as set out in the provider’s water services strategy for the financial year, with the actual activities and performance levels; and

(b)explains any material differences between the provider’s performance and the provider’s water services strategy. Strategy needs to be defined in the context of the rating collection and applied use for FIS 

(2)

A water services annual report must, in relation to each group of water services activities of the water service provider,—

(a)identify the water services activities within the group of water services activities; and who used the services and

(b)identify the outcomes and objectives to which the group of water services activities primarily contributes (as referred to in the provider’s water services strategy); and

(c)report the results of any measurement undertaken during the financial year of progress towards achieving those outcomes and objectives.

Financial statements

2Water services annual report: financial statements

(1)

A water services annual report for a water service provider must include the following information for the relevant financial year:

(a)a complete set of audited financial statements for the water provider that complies with generally accepted accounting practice; and in compliance with the Fair Trading Act 1986

(b)for each group of water services activities—

(i)a statement of comprehensive revenue and expense; and

(ii)a statement of cash flows; and

(iii)a statement of financial position; including water service asset yearly revaluation supported by industry justification and independent arms length industry verification for the accounting revaluation and

(c)any other prescribed information. Including short and long term debt allocation between three waters assets and non three waters assets   

and 

(iv) a statement of source and disposition of funds for all water rates,  levies and water charges  collected and disbursed ,and

(v) a comparative statement of  source and disposition of funds for other NON water rating levies collected and disbursed with

(vi) a reconciliation  of (iv) and (v) to ensure there is no double counting – aka ‘double dipping’  by the TA 

(2)

A water services annual report must also include the forecast financial statements that were prepared for the financial year immediately preceding the first financial year to which the report relates. And for the Asset transfer Transition year to show the movement of assets, debt and rating levy income and appropriation as differentiated from the old combined model to the new separate water services model.   

(3)

The information provided—

(a)under subclause (1) must be presented in a way that allows a person to compare the financial statements with the forecast financial statements for the financial year covered by the report (that were included in the provider’s water services strategy):

(b)under subclause (1)(c) must be provided in the prescribed form. What is the “prescribed form “?

3Water services annual report: water organisation

(1)

A water services annual report for a water organisation must specify the dividend, if any, that the organisation’s shareholders have authorised the organisation to pay (or the maximum dividend that the organisation proposes to pay) for its equity securities (other than fixed interest securities).The purpose of the Water Services entity is NOT to make a profit – it is simply a service cost recovery. A dividend should NOT be payable to any private individual, ratepayer, or shareholder or trustee or any related party entity to a TA. Any surplus should that occur will be reinvested back into the operating budget or used to pay off Three Waters Debt. 

(2)

If a water organisation’s shareholders authorise the organisation to pay a dividend, individual shareholders should not be permitted to force a dividend – it is a service cost recovery model ONLY the financial principle in section 16(1)(a) does not apply with respect to the dividend.

4Water services annual report: capital expenditure

(1)

A water services annual report for a water service provider must include, for each group of water services activities provided by the water service provider, an a statement that compares—

(a)the capital expenditure budgeted for the water service provider (as set out in the provider’s water services strategy for the financial year); with

(b)the capital expenditure that the water service provider actually spent in the financial year.

(2)

The statement must show separately the water service provider’s budgeted expenditure, and the provider’s actual expenditure,—

(a)to meet any additional demand for a group of water services activities; and

(b)to improve the level of service in relation to a group of water services activities; and

(c)to replace any assets that are part of the water services infrastructure.

(3)

For the purpose of subclause (2), if capital expenditure is budgeted for 2 or all of the purposes in that subclause, the expenditure may be treated as if it were budgeted solely in relation to the primary purpose of the expenditure.

The capital expenditure must state if it was funded from rating income or from borrowings.

If it is the latter then the term, interest rate, roll over date and security assets over which the loan was secured be publicly stated as these are public assets.  

5 Water services annual report: funding impact statement

A water services annual report for a water service provider must include, for each group of water services activities provided by the water service provider, a funding impact statement that—

(a)

is in the prescribed form; Define the ‘prescribed’ form in the schedule to the Act  and

(b)identifies the water service provider’s funds produced by each source of funding; and

(c)specifies how those funds were applied; to town ratepayers on connection,  and / or to rural ratepayers without any water service connections or ability to use the services and

(d)compares the information provided under paragraphs (b) and (c) with information included in the water service provider’s water services strategy.

6Water services annual report: insurance of assets

A water services annual report for a water service provider must include the following information in relation to the water service provider:

(a)

the total value of the assets in the water services infrastructure that are owned by the water service provider and that are insured: The Water Services serviceprovider does not ‘own’ the eater services assets – that vehicle can only own the service organisational delivery mechanism being the staff , IP, software or any non ratepayer funded additions that have made to carry out their organisational work or operational daily duties.

(b)the maximum total amount for which those assets are insured:

(c)the total value of the assets in the water services infrastructure that are—

(i)

owned by the water service provider; the ratepayers own all the water services assets and

(ii)

covered by a financial risk-sharing arrangement:

(d)the maximum total amount available to the water service provider under those risk-sharing arrangements:

(e)the total value of the assets in the water services infrastructure that are—

(i)owned by the water service provider; the ratepayers own all the water services assets and

(ii)

self-insured:

(f)the value of any fund maintained by the water service provider for the purpose of self-insuring those assets.

Statement of service

7 Water services annual report: statement of service

A water services annual report for a water service provider must include, for each group of water services activities provided by the water service provider, a statement of service that—

(a)compares the actual level of service provided in relation to each group of water services activities with the intended service level; and

(b)specifies whether any intended changes to the service levels were achieved; and

(c)if there is a significant difference between the intended service level and the service level that was achieved, specifies the reasons for that difference.

9 Water services annual report: results of consumer feedback

A water services annual report must include information relating to—

(a)the results of any feedback sought from the water service provider’s consumers in relation to the water services provided to them, as referred to in the provider’s water services strategy (see clause 4 of Schedule 3); and

(b)how the provider addressed, or proposes to address, any significant matters raised in the feedback.

Schedule 6 New Schedule 7 inserted into Commerce Act 1986

s 234

Schedule 7Additional matters relating to regulation of water services

Part 1Ring-fencing of revenue

3Ring-fencing of revenue

(1)

Every person that is a regulated supplier in relation to 1 or more regulated water services must spend the revenue it receives from providing regulated water services on providing its own regulated water services (including on maintenance, improvements, and providing for growth).

Example

A local government water service supplier (council A) is a regulated supplier in relation to water supply services (for example for drinking water) and wastewater services. Council A receives revenue of $100 million from providing water supply services and revenue of $50 million from providing wastewater services. Council A must spend $150 million on water supply services and wastewater services combined (but this subclause does not prevent cross-subsidisation between the 2 services).

There is no mention in the legislation of the calculation, formulation or isolation of the total ratepayer rating collection take to allow the ring fencing of Rating levies collected to be applied to Water Service being guaranteed to LGFA under the TA’s debt lending agreement, furthermore no mention of the right of any TA  to secure those assets – land or  Water Services assets as owned by the self sufficient rural ratepayers who self provide their own water services [ domestic self supply ].  

Currently TA’s pledge or guarantee to LGFA the general rating levies as  security for local body TA debt

This is acknowledged by DIA in C Gilmore OIR OIR: 2425/1228 16 January 2025  where by it states :

As per the Amendment and Restatement Deed (Guarantee and Indemnity) between the Kapiti Coast District Council and TEL Security Trustee (LGFA) Limited referencing page 36: “security” includes a guarantee or indemnity, a security interest (as construed and defined in the Personal Property Securities Act 1999), mortgage, lien, pledge, any interest in land of a security nature, any other security arrangement creating in effect security for the payment of a monetary obligation or the observance of any other obligation, and any other arrangement having like economic effect over any property, assets or revenues. Please provide full details of the securities referred to above (secured against the Kapiti Coast District Council borrowings to date) 

KCDC Answer:

The definition noted above includes a range of options that could be used to provide security. The Council’s borrowings from the Local Government Funding Agency are secured by a Debenture Trust Deed over Council’s rates revenue. 

Ngā mihi, 

Group Manager Corporate Services Te Kaihautū Ratonga Tōpū

Respondent’s notes for the Select Committee:

KCDC do not have any legal right to secure any PRIVATE ratepayer held mortgages, liens, pledges, any interest in land of a security nature, or any other security arrangement creating in effect security for the payment of a monetary obligation or the observance of any other obligation, and any other arrangement having like economic effect over any private property owned land, or associated water services assets paid for by the Ratepayers. Any attempt to secure this must be reported  and disclosed.

The only security that TA’s  can provide is over Rating levy collections.  

57Y Regulations relating to protection of consumers of water services

Does not provide any definition of “protection “or remedies for their situation where a TA charges water services water charges, overhead, planning and governance charges related to water service that is cross charged [cross subsidised by] to self sufficient rural ratepayers who cannot access the water services and the local TA cannot provide them for the simple reason that there is no water service connections to the property either on or out.     

290 Section 5 amended (Māori interests)

(1) Repeal section 5(a) and (b).

(2)Replace section 5(d) and (e) with:

(d)section 17(1) and (2) provides that the role of the Māori Advisory Group is to advise the board and the Water Services Authority on Māori interests and knowledge, from a Māori perspective and in accordance with the group’s terms of reference:

(e)section 17(3) requires the board to take the advice of the Māori Advisory Group into account:

(3)Replace section 5(f)(ii) with:

(ii)partnering and engaging early and meaningfully with Māori, including to inform how the Water Services Authority can—

(i)take into account any relevant national direction issued under Part 5 of the Resource Management Act 1991 and any regional plans that relate to freshwater; and

(ii)understand, support, and enable the exercise of mātauranga Māori, tikanga Māori, and kaitiakitanga:

The Treaty of Waitangi does not state or support Co-governance that is a construct developed in the last few decades and not what the treaty actually stated

While it is clear that all races and ethnic groups in New Zealand should be treated equally and in consideration to their place in the demographic it is unadvisable for a proposed bill to embed racial discrimination or racial preference into legislation.

Any publicly controlled new LWDW Water Services Entity should ensure proper democratic constitution with trustees or shareholders across all demographics and to represent majorities.  

291 Section 10 amended (Objectives of Taumata Arowai)

(1)

Repeal section 10(d).

(2)

After section 10(f), insert:

(g)

effectively develop and administer National Engineering Design Standards for the design, construction, and operational performance of network infrastructure used in land development.

This appears out of context, not what the treaty states and is not democratically aligned with New Zealand’s total ethnic demograph. 

295Section 17 amended (Further provisions relating to Māori Advisory Group)

(1)

Replace section 17(2) with:

(2)The Māori Advisory Group must provide advice under subsection (1)—

(a)from a Māori perspective; and

(b)within the terms of reference prepared and agreed under subsection (4)(b).

(2)In section 17(3)(a), replace “have regard to” with “take into account”.

(3)Repeal section 17(3)(b).

What is the actionable meaning of ‘perspective’ and what does ‘take into account’ Actually mean in the execution of this act?

This appears out of context, not what the treaty states and is not democratically aligned with New Zealand’s total ethnic demograph 

Schedule 3

Contents of water services strategy

5 Water services strategy: financial matters

(1)A water services strategy for a water service provider must include, for each year to which the strategy relates, a complete set of financial statements for the water service provider that comply with generally accepted accounting practice. Does this mean it should be ‘True and Fair’  or some other improper construct that NZICA are now maintaining that Auditors are no longer accountable for? 

(2)A water services strategy must include the following information for each group of water services activities for which the water service provider is responsible:

(a)the water service provider’s intended approach to funding, revenue, and pricing, which must include detailed information on the following for the first 3 financial years to which the water services strategy relates:

(i)the water service provider’s intended approach to pricing the water services it provides; and

(ii)the water service provider’s intended approach to charging consumers; and

(iii)the water service provider’s intended sources of funding and revenue:

(b)the amount of capital expenditure and operating expenditure that the provider has budgeted, in each financial year to which the water services strategy relates, for the purposes of—

(i)improving the level of service; and

(ii)meeting additional demand for the group of water services activities; and

(iii)replacing existing assets in the water services infrastructure:

(c)the forecast financial statements that were prepared for the financial year immediately before the first financial year to which the strategy relates:

(d)each of the following statements for each financial year to which the water services strategy relates:

(i)a forecast statement of comprehensive revenue and expenses:

(ii)a forecast statement of cash flow:

(iii)a forecast statement of financial position:

(e)a funding impact statement for each financial year to which the water services strategy relates:

(f)any other information required by the Commerce Commission (see section 194).

(3)

For the purposes of subclause (2)(b), if capital expenditure is budgeted for 2 or all of the purposes in that paragraph, the expenditure may be treated as if it were budgeted solely in relation to the primary purpose of the expenditure.

(4)

For the purposes of subclause (2)(c), the previous year’s financial statements must be presented in a way that allows the public to compare the financial statements with the forecast financial statements for each of the financial years covered by the strategy.

(5)

However, a water services strategy is not required to include the financial statements required under subclause (2)(d) if it is the first water services strategy for the water service provider.

(6)

For the purposes of subclause (2)(e), a funding impact statement must—

(a)be in the prescribed form; and the prescribed form is not defined in any Schedules 

(b)identify—

(i)the sources of funding to be used by the water service provider; and

(ii)the amount of funds expected to be produced from each source; and

(iii)how the funds are to be applied. And if loans then how the funds are to be secured and over which assets.  

(7)Information provided under subclause (2)(f) must be provided in accordance with any requirements set by the Commerce Commission under Part 4 of the Commerce Act 1986.

6 Water services strategy: additional matters for water organisations

(1)This clause applies to a water services strategy prepared by a water organisation.

(2)In addition to the information required under clause 5, the water services strategy must include—

(a)the organisation’s policy on giving security for borrowing; and upon who’s assets the borrowing is secured over 

(b)the organisation’s objectives for holding and managing financial investments and equity securities; and

(c)the organisation’s quantified targets for returns on financial investments and equity securities; and the Water Services Service providers or organisations should not be permitted to hold equity investment securities or demand a ROI or financial return on the ratepayer levies paid to them. It is a Service cost delivery and recovery mechanism only. 

(d)how the organisation has performed in relation to any performance indicators and measures set out in the organisation’s statement of expectations.

KPI’s on Service Delivery performance yes.

5 Water services annual report: funding impact statement

A water services annual report for a water service provider must include, for each group of water services activities provided by the water service provider, a funding impact statement that—

(a)is in the prescribed form; and should be defined in the schedules

(b)identifies the water service provider’s funds produced by each source of funding; and

(c)specifies how those funds were applied; and

(d)compares the information provided under paragraphs (b) and (c) with information included in the water service provider’s water services strategy.

Part 6  Provisions relating to Local Government (Water Services) Act 2024

Does not address who pays for, and how all the associated Departments, NGO’s agencies, influencers, and bureaucratic overhead fees and charges will be quantified, paid for, and managed for  the following :- 

The new chosen TA Service provider and Delivery Organisation 

Comcom

DIA

MBIE

Te Arowai – Te Maori Water Services Authority – Taumata Arowai

WC – Water Care

WNZ – WaterNZ   [is under stood to be paid by industry subscribers not ratepayers] 

WS – Water Services 

The Levies paid to the above organisations, by the ratepayers  must be disclosed  – whether that be by 

1. Direct voumteris water charging or 
2. District Wide aggregated levies  or
3. Cross subsidised general levies   

Part 1Ring-fencing of revenue

3  Ring-fencing of revenue

(7)

This clause does not prevent a supplier from making a profit or paying a dividend to shareholders, but the Commission may take any profit or dividend into account when setting requirements under subclause (2).

This Clause (7) should be struck out 

The purpose of the Water Services entity is NOT to make a profit – it is simply a service cost recovery paid for by water rates. A dividend should NOT be payable to any private individual, ratepayer, or shareholder or trustee or any related party entity to a TA. Any surplus, should that occur will be reinvested back into the operating budget or used to pay off Three Waters Debt. 

C. Recommendations summary and Conclusion

Recommendation summary of reporting Information Disclosure requirements  

1. Provision of the information Disclosure and Reporting requirements as identified or highlighted in this document specifically to cover :

• quality of service 
•  asset management 
• Detailed  Financial accounting information, and 
•  pricing and contracts.   

2. A User Pays system of Water Services service delivery is to be adopted under the legislation and the most cost beneficial User Pays model should be mandated to be adopted by the legislation [its useful life to be up to 100 years with CBA to be across the majority of timeframes depending on their sub WS asset type]  

3.The purpose of the Water Services entity is NOT to make a profit – it is simply a service cost recovery paid for by water rates. A dividend should NOT be payable to any private individual, ratepayer, or shareholder or trustee or any related party entity to a TA. Any surplus, should that occur will be reinvested back into the operating budget or used to pay off Three Waters Debt. 

4. Cross Subsidisation of Water Services expenditure  both CAPEX and Opex from non water services rating unit collections should be explicitly exempted or forbidden from the legislation.  

5. Any Water Services entity organisation type chosen by a TA is to remain in public ownership in perpetuity. It is not to be sequestered into an LLC ,Trust or TA Business unit unless the Ratepayer rating units can be registered as shareholders, trustees,  or direct parties to the agreement. Ownership of the Water Services Assets is to remain with the ratepayers  who purchased or paid for them.   

6. No individual ethnic group is to be favoured or given preferential rights under any Water Services Entity organisation or ‘ownership’ model adopted by any TA. All New Zealand ratepayers are equal under the law,  all New Zealand ratepayers  have equal rights to water and the assets it is conveyed in or on. 

7. With regard to the Financial statements of the new Water Services entity 

(iii)a statement of financial position; including water service asset yearly revaluation supported by industry justification and independent arms length industry verification for the accounting revaluation and

(c)any other prescribed information. Including short and long term debt allocation between three waters assets and non three waters assets   

and 

(iv) a statement of source and disposition of funds for all water rates,  levies and water charges  collected and disbursed ,and

(v) a comparative statement of  source and disposition of funds for other NON water rating levies collected and disbursed with

(vi) a reconciliation  of (iv) and (v) to ensure there is no double counting – aka ‘double dipping’  by the TA 

(2)

A water services annual report must also include the forecast financial statements that were prepared for the financial year immediately preceding the first financial year to which the report relates. And for the Asset transfer Transition year to show the movement of assets, debt and rating levy income and appropriation as differentiated from the old combined model to the new separate water services model.   

8. Definition and quantification of equitable and publicly stated Financial Valuation methodology of the Water Services Assets; by independently verified arms length valuers, and the methodology, Definition and quantification  of Transfer of Assets to the new entity and how that is to be measured and assessed in equitable terms to all ratepayers according to their usage of the Water Services assets.

9. To provide in the legislation for a reduction in base rating levies [ i.e non three waters base core activities ] for all ratepayers  to be actioned as soon as the separation transfer of the Water Assets occurs 1^st July 2026 

10. To provide in the legislation for a reduction in base rating levies [ i.e non three waters base core activities ] to be actioned by the Commerce Commission for all rural ratepayers, as soon as the transfer of the Water Assets occurs 1^st July 2026. 

Conclusion

The Respondent notes

The concern should be for the Commerce Commission to consider the legal liability  of TA’s – resulting  in this case KCDC, for embedded errors, omissions, legislative contradictions, poor drafting and potentially improper execution of this current  Local Government (Water Services) Bill 2024 by their refusal to embed those requirements in the current public consultation document, and with no reference to Commerce Commission reporting and Information Disclosure requirements. 

Unless the issues raised here are fully investigated, and the Bill corrected the ID requirements corrected, prior to the premature consultations and LWDW entities being finalised before the legislation is even passed; it would appear that this piece of legislation will incur legal difficulties in its acceptance and execution.    

Thank you for your attention and consideration of this constructive presentation.

Yours Faithfully

John Andrews 

As every Ratepayer in Kapiti knows, paying for an army of unelected, unaccountable and unproductive bureaucrats who simply create new rules and regulations is not a good way of achieving prosperity.

The EU (and its honorary EU Kommissar, Keir Starmer) imagine their collective military is more than a match for those of their pretend enemies like Iran, China, and naturally, Russia = but the reality is different. Most of it has been heavily subsidised by the Americans; if the Europeans have to pay for it themselves, which Trump has made clear they will, it’s not going far at all. It’s one thing to spend more to enrich their armaments manufacturers, it’s another to find front-soldiers willing to sacrifice themselves for the Globalists’ plans. Despite all his theatre pronouncements, Kommissar Keir is said to only have 37,000 front-soldiers now which wouldn’t even fill Wembley Stadium and Mad Macron-Napoleon little more than that.

Currently neither the Trump administration, nor in fact Germany’s new Reichskanzler Herr Merz have any time for President of the European Commission, Ursula ‘fond of Lyin’ von der Leyen. As for Kaja Kallas–

The Senate confirmed Jay Bhattacharya MD, Ph.D. to be the next director of the National Institutes of Health on Wednesday our time on a 53-47 party-line vote. Jay Bhattacharya wants to revamp the nation’s premier research institution, shifting its focus to chronic disease and ensuring free speech in differing scientific views.

“Dissent is the very essence of science. I will foster a culture where NIH leadership will actively encourage different perspectives and create an environment where scientists – including early career scientists – can express disagreement respectfully,” he says.

During Covidiocy, Jay Bhattacharya clashed with the mainstream medical establishment, including the NIH, over lockdowns and other measures designed to control the spread of the virus. He says he was shunned and penalized for his views and he didn’t want anyone else to suffer the same fate. He was thus an equivalent of Dr Sam Baily in Jacindaland, but unlike her has now been victorious in his battle with the establishment.

A late summer view; we’ll return about this time next month to see how it looks then.

Leftists are hypocrites everywhere.

It was particularly damaged by the Antifa riots of mid-2020 and Democrat Party nuttiness since has been awful. But like Wellington, it could be turned around if the Leftists on the City Council are replaced with sensible people.

All of it painted.