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15.5 Beneficiaries and Contributors

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The benefits from the type of work proposed for the Lower Waikato Zone (River Management, Flood Protection, Soil Conservation and Catchment Oversight) are discussed above in sections 4 to 9.

The Lower Waikato Waipa Control Scheme provides direct protection to approximately 17,200 hectares of land within the Lower Waikato River Valley. The remaining 16,500 ha of floodplain receives benefits from general river improvements and lowered river levels. In addition, within the Mangawara River Valley, some 17,500 ha of land is protected by the existing Scheme.

Council has engaged independent technical experts to recommend an allocation of benefits and to establish the basis for a differential rating scheme. Set out below are extracts from that work (Meister and Quasi,2001).

Direct Benefits
These benefits accrue directly to the user of the service. The LWWCS provides direct benefits to private land and property by affording flood protection from the main rivers and tributary streams. The area of benefits covers both urban and rural properties.

The main direct beneficiaries are the landowners and utilities directly protected by the scheme.

Production Benefits
Landowners receive direct benefits in the form of production increases and reduced flood damages. The increased security (from flooding) has led to land development with many thousands of hectares having been cleared, fertilised and drained. Much of that land has gone into dairy farming since the soils in the flood plain area are highly productive. Hence land with previously very low productivity is now in a variety of highly productive land use enterprises.

To demonstrate that more clearly, most of the land protected by Scheme would, without the Scheme being place, be classified as wetland, allowing limited grazing, mostly restricted to the summer months. With the security of the Scheme this land has now been developed, most of it for dairy farming, some beef and cropping. The value of the Scheme is reflected in what has happened to land values.

Environment Waikato has engaged classifiers to classify the relative direct benefits to land. To assist with this they have for the scheme area determined the Net Added Land Value, Net Added Cash Operating Surplus and Potential Further Added Cash Operating Surplus. This information is used to determining relativities for differential rating purposes, and also demonstrates the benefits of the Scheme.

Utility Benefits
Utilities, primarily being transport network operators, receive direct benefits in terms of saved damage to roads and saved costs of traffic diversions and delays. These transport network operators are not currently rateable under the Rating Powers Act for benefits received.

The saved cost of damage to highways and roads, traffic diversion costs, and rescue and repair costs relates primarily to State Highways in the region. The beneficiaries therefore are the New Zealand public (including the people in the region). Hence payment for benefits received should come from those authorities that manage these roads.
Within the LWWCS the benefits received by major roads and rail links from flood protection are:

  1. State Highway One Huntly to Pokeno
  2. North Island Main Trunk Line Huntly - Mercer
  3. State Highway 3 - Otorohanga.
  4. North Island Main Trunk Line - Otorohanga

Indirect Benefits
These kinds of benefits accrue to third parties (those not directly protected by the scheme) and can often accrue collectively and widely throughout the region. These benefits are technically difficult and administratively inefficient to identify and quantify.

Indirect benefits are all those benefits that extend outside the immediate flood plain. It is land that to a certain extent is reliant on the infra-structural, economic, and community factors in the protected flood plains. The security of the flood plains area has led to a greater security for access between dairy farms and dairy factory, sheep/cattle farms and freezing works or sale yards, and the transportation of all types of raw materials and finished products. The increase in security from flooding of the flood plains area and the security of access have led to a situation “where high ground may now be utilised more effectively for dairy farming or other intensive land use owning to the availability of adjacent protected land”. There is much evidence of this in the immediately adjacent areas.

This increase in intensification in turn has an impact on the local area and the region as a whole. Input-output tables for the region show that for every extra dollar of output delivered to final demand (and this includes production and processing of agricultural products) regional output will increase by three to four dollars. The scheme therefore results in not just economic units of land, but viable local economies, where the protection from flooding has provided the confidence to invest in development.

Further to these indirect economic benefits we also have benefits of peace of mind and resource management. This applies especially to those living adjacent to the flood plain. Although floods do not directly affect these people and their houses, security of access to schools, work and markets is a significant benefit. Further the role of Environment Waikato in providing early warning and forecasting of floods contributes to the peace of mind these people experience.

Other indirect benefits are environmental / ecosystem benefits, and recreational benefits. The environmental / ecosystem benefits relate in the main to the main Waikato River channel plantings and stability control. The Scheme also undertakes regular monitoring of changes in the river bed through annual water level profile measurements and 10 yearly surveys of some 200 river cross sections.

It is recognised that the Scheme has had some adverse effects on the Whangamarino wetland and Lake Waikare, which were initially affected by the Scheme (and hence a negative indirect benefit occurred). The Scheme requirement to maintain a minimum amount of flood storage within the wetland has been a major factor in preventing further private development within the wetland.

Today we could conclude that DOC (on behalf of the wider community) received a negative benefit from the scheme both in terms on lower lake levels and ecological effects. The same goes for recreational benefits from Lake Waikare that have been affected by the scheme due to lower water levels, which makes it difficult to launch boats and sail. Also recreational hunters complained about more difficult access.

Indirect benefits from the flood protection scheme accrue to people in the sub-catchment, catchment and wider region, however the level of indirect benefit received is greater to people in the sub-catchment area as compared to the catchment area and the wider region. It is hard to see any justification for separating the people in the wider catchment (beyond the sub-catchment boundary) and those in the region in general. Therefore the cost allocation of indirect benefits is broken into:

  • Regional community benefit (region and catchment), and
  • Local community benefit (sub-catchment).

When developing its Funding Policy for work of this nature, Council engages independent technical experts to advise on the identification of beneficiaries and contributors for each activity, along with the extent of benefit and contribution. These experts base their analysis on the principles outlined in sections 4 and 5. Where Council has previously developed and consulted on existing funding policies, that previous work is taken into account when considering future funding policies. Council considers that the beneficiaries and contributors, and extent of benefit and contribution are as set out in section 16.