Water Services National Training Group

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Water Services National Training Group

• 12th Annual Conference
• 11th September, 2008

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Water Services National Training Group

• Delivery

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Water Services - Compliance, Capacity,
Affordability

• Alec Fleming
• County Manager
• Clare County Council

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Water

• Food
• Transporter of Waste

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Compliance

• As a food, water must be produced to the highest
  standard.
• Consumer must have utmost confidence.
• Failure to meet standards can have very serious
  consequences.

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Compliance (contd.) The Current Situation

• Ireland is facing a number of unfavourable ECJ
  Judgements with possible significant fines.
• Recent EPA report on drinking water quality
  unfavourable in its view of Las.
• EPA Reports water framework results indicate
  significant problems regarding quality of water
  resources.
• LAs have received improvement notices from EPA
  re Water Services Infrastructure.
• HSA has also issued Improvement Notices.
• Considerable backlog of under-investment.
• Public confidence at an all-time low.
• Fisheries have taken legal action against LAs.

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Compliance (contd.) EPA Drinking Water
Quality Report focuses on

• Risk Minimisation
• Source Protection
• It puts security of supply firmly on the Agenda

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Compliance (contd.) Water Quality

• According to EPA, provision of high quality water
  standards is over-riding goal for Ireland Inc
• Main Threat most widespread threat to the
  quality of our surface waters is the inputs of
  phosphorous and nitrogen above background
  levelsThe principal sourcesare municipal sewage
  discharges and losses from agricultural
  activities. In addition, a significant
  proportion of private drinking water supplies are
  contaminated by bacteria (EPA 2020 Vision
  2007 14)
• Major Challenges more than half of surface
  water and groundwater bodies in Ireland are at
  risk of failing to meet EU water quality
  objectives. Bringing water resources up to
  standard, eliminating contamination of drinking
  water supplies and implementing water
  conservation measures are key priorities for
  Ireland. The provision of urban wastewater
  treatment for all inland receiving waters is also
  a major challenge (EPA 200714)
• Beyond Catch-Up The supply of large quantities
  of clean water to an ever-increasing population
  depends on proper infrastructure being in place
  at the right timewe need to begin to plan for
  future water usage and wastewater treatment
  needs, and to move beyond a system of catch-up
  infrastructure (EPA14)

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Compliance (contd.) Implications for Local
Authorities

• Standards Determined.
• Non-Compliance is a serious felony.
• Corporate and Personal Liability.

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Compliance (contd.) Issues

• Water Framework Directive.
• Demographic change.
• Long-term funding challenge.
• Activities subject to stricter monitoring.
• Additional compliance and monitoring costs.
• Legislation additional responsibility and
  consequences for local authorities.
• Staffing and resources more generally.

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Compliance (contd.) Population Increase directly
impacts on water services
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Compliance (contd.) Recent Cases where Water
Quality became an issue

• Recent example and lessons for wider system.
• Crisis caused by inadequate and out-dated
  treatment facilities, fast-growing population.
• Contributory factors may have been
• Agricultural practices and municipal discharges.
• Delays in putting necessary infrastructure in
  place.
• Funding difficulties.
• Staff resources a problem.
• Processes for risk assessment and prioritisation
  nationally may be an issue.

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Compliance (contd.) Fall-out

• Health implications for members of public.
• Lack of confidence.
• Impact on business.
• Political implications.
• Inevitable financial Implications.
• EU focus on water quality.

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Compliance (contd.) Challenge is

• To learn from this experience.
• Affords us opportunity to ensure that action is
  taken to deliver high quality water.

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Compliance (contd.) Resources

• To move towards the achievement of a standards
• required, requires
• Certainty in relation to long-term funding both
  in terms of amount and sources
• Dependence on development contributions poses
  level of risks for local authorities
• Resources need to be targeted in strategic way at
  national level
• Radical approach on all sides will be needed to
  reach challenging targets i.e. identifying
  actions required to deliver a programme.

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Capacity

• Water Services Infrastructure is critical to
  economic development similar to roads and
  telecommunications.
• There must be sufficient capacity to provide for
  both the needs of industry and housing.

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Affordability

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Affordability (contd.)

• DoEHLG previously provided 100 funding for
  domestic infrastructure.
• Only existing domestic funded, leading to
• Under-Design of Schemes.
• Schemes not feasible where capped unit cost if
  exceeded.
• Heavy bias against undeveloped rural settlements.
• Average cost to be met by local authority of 1/3
  of capital cost.
• Rural counties with large programme cannot make
  up deficit.
• No account taken of economies of scale and
  realistic future demand.

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Affordability (contd.)

• In theory, future domestic funded via dev
  levies and water charges
• In practice, these are being part-funded through
  borrowing
• In order to fully recover monies, charges would
  need to rise substantially for many local
  authorities
• Depending on the stream of income expected from
  development levies, may not be a sustainable
  financial stream for the future
• It may be the case that depreciation is not
  provided for in current model could lead to
  running down of expensive asset base over time.
  
• No certainty that level of income in individual
  cases derived from development contributions will
  provide sufficient funding for capital investment
  needed.
• Storm Water Govt funding needed in addition to
  this particularly given impact of climate
  change on flooding.
• Social/Affordable Housing non-funding by DoEHLG
  of necessary additional infrastructure is an
  issue.

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Affordability (contd.)

• According to DoEHLG paper, non-domestic
  infrastructure are fully funded by LA via
  consolidated water charges or specific capital
  contributions from significant users.
• But consolidated water charges in many cases do
  not reflect full cost recovery.
• This is due to political, local and national
  competitiveness pressures.
• Implication 1 local govt sector funding
  dependent on future buoyancy of property market
  and commercial development,
• Implication 2 - in order to meet water quality
  standards, infrastructure needs, and progress
  regional development, LAs will need to borrow to
  invest without certainty of future income,
• Implication 3 increased pressure on borrowing
  likely in less developed areas,
• Implication 4 - Unit cost of water charges will
  never be uniform - implications for regional
  development and regional competitiveness,

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Affordability (contd.)

• No certainty that Ireland Inc can reach EU
  requirements by proceeding with this policy.
• Assumption that level of need, level of
  development, or level of income derived from
  development is uniform across the country.
• Appears to be expectation / belief that, once
  water pricing is fully applied, that water
  charges will be uniform across the country this
  is unrealistic.

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Affordability (contd.)

• Rural authorities unable to fund local
  contribution as interpreted currently under the
  WPP
• Huge gap in resources (human finance) currently
  available relative to what is required to achieve
  EPA standards

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Affordability (contd.)

• Depreciation (Cost of Capital).
• Domestic element (identify and fund separately).
• Cost of maintaining new assets.
• Treat DBO and direct provision equally.
• Risk minimisation to be funded.
• Higher standards to be funded.
• Cost of monitoring private supplies to be funded.

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Finally Essential to Accept

• The critical impact of provision of sanitary
  services to
• Support development generally.
• Meet the economic social objectives in the
  National Spatial Strategy, Regional Planning
  Guidelines Local Plans.
• Implement Government policy on regional
  development e.g. Rural Planning Guidelines.

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Water Services National Training Group

• 12th Annual Conference
• 11th September, 2008