Financial and Policy issues set the boundaries … for a new Water Supply

Council engineers usually set the ball rolling when a new water supply project is planned. They are the first to react to operational pressures of customer service delivery. Their initial plans will develop based on demand assessments, design considerations, location options, technology and quality standards.

Often, late in the piece, the financial and policy boundaries for the project development only come to light when a draft proposal for the development first encounters governance and affordability questions from general management and elected members. This push back invariably involves issues such as the project’s financial feasibility that to date had yet to be addressed.

A salutary lesson-and a case study of the consequences of failing to comprehensively plan a wastewater project-is superbly documented at kaipara.concerns.co.nz … “The Mangawhai Fiasco”

This haphazard planning approach is invariably more expensive. It may unnecessarily be divisive as another way exists within a process that will be greatly assisted by the capability of the www.cprlifesaver.co.nz website. This recently launched cost-effective resource, delivers comprehensive planning focussed on financial and economic realities and firmly places “the horse before the cart”.

The cprlifesaver subscription website has been purpose-builtto support and structure a financial and policy framework for all New Zealand LTP and capital project developments. There are three sections on the site, the acronym “CPR” points to these in sections titled Comparative, Performance and Research. 

The sites Performance and Research features, include extensive taxonomies of existing New Zealand local government reports, references and studies relevant to Water Supply and other capital expenditure developments.

The New Zealand local government sector benefits hugely from the collegial nature of its activities- some other Council is likely to have done it all before-much of their evidence is in the Public Domain, their experience is documented, helpful and is based on uniform standards and practice that readily translate to the benefit of others.

The ethos of the cprlifesaver site is to encourage and foster this Council-wide cooperation. A forum, blog and a standing offer for listing best practice case studies are facilitated. The collective body of knowledge has been carefully curated as it forms an obvious starting point in developing any fully comprehensive cost-benefitted proposal.

This includes the development of capital expenditure project proposals that include highlighting financial and economic project risks and responsibilities, that is, considerations typically beyond the ambit of pure engineering considerations.

The website gives quick, direct access to authoritative sources for National water supply standards, relevant RMA and other operational requirements and specific performance settings including “National” macro-economic capacity and growth projections. References also cover technical citation of sources of varying state of the art water supply equipment and technology. All can be accessed from the extensive cprlifesaver basic references and databases.

The essential research-related first stage for any Council project planning is time consuming and expensive for any Council beginning the process “from scratch”. The developing cprlifesaver “Research” and “Performance” functions represent a valuable part of the evidence gained from subscribing to the site.

The third area the cprlifesaver site supports-its proprietary IP-is found in the extensive “Comparative” section-the “C” of the “CPR”.

This part of the site currently comprises over 100 financial and economic co-efficient “ratios”, tables and findings. All these metrics are derived from independent, official and predominantly audit approved data sources.

Water supply expenditures, for example are displayed within the cprlifesaver Comparative “stats” in the following fashion:

• within a timeline covering the most currently available official data taken from the last five financial years-2014 to 2018-and displayed in extensive , charts and graphs;
• as a percentage of Council total expenditures and on a per ratepayer basis;
• aggregated into measures such as the Niceties to Amenities ratio;
• contained within five “Peer” group of comparable Councils;
• using averages, proportions, ratios and other benchmarks and
• for water charges-as a proportion of average residential rates  

The usefulness-the essentials for comprehensive CB analysis-of these metrics are their stress-testing, sustainability and financial feasibility qualities. These capabilities form the basis of and cover the fields of legislative compliant option selection as well as providing realistic evidence-based project feasibility and affordability testing.

In the design of the website, the underlying assumption is that- some other New Zealand Council-the comparative or a “Peer” Council in real life terms has been operating within financial and economic parameters that logically provide some assurances of feasibility and affordability-for this particular project.

Financial stress testing, for example-assurances for remaining within mandated debt ceiling boundaries is supported by the evidence. Evidence contained within the debt, funding and service-charging findings derived from cprlifesaver based iterations and projections. These project the financial effects of proposed capital expenditures including development of for instance a new water supply plant.

Reference to cprlifesaver-based findings, supported with analysis gained at an early stage in the development of a Water Supply project, provides timely assurance for engineers and others principally with firm option selections and budgetary boundaries to guide Council design and supply-capacity and funding decision-making.

The www.cprlifesaver.co.nz New Zealand local government finance and policy “bespoke” website is a proprietary product of CPR Consultants. To receive the marketing package and annual subscription details:

Please contact Larry Mitchell larry@kauriglen.co.nz Ph 09 4220598 The demo-sample website is at www.cprlifesaver.co.nz

Larry Mitchell 28/11/2019 878 Words