COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL

MEETING OF ENVIRONMENT SPC

Monday, February 06, 2012

HEADED ITEM NO.8

HEADED ITEM: G. Lee

8. Consultation on the Establishment of a Public Water Utility and the future funding of water services

REPLY:

Consultation on the Establishment of Irish Water

 

A public consultation process has been launched by the Minister for Environment Community Local Government in order to elicit views on the establishment of a new national utility company to oversee water services.  

 These proposals are in line with a commitment in the ‘Programme for Government’ to create a new public utility, Irish Water. The ‘EU/IMF/ECB Programme of Financial Support for Ireland’ contains a commitment to prepare proposals for implementation of the recommendations of an independent assessment of the transfer of responsibility for water service provision to a water utility company. The Programme also covers the introduction of domestic water charges. An independent assessment was carried out by PricewaterhouseCoopers (Pwc) under contract to the Department of Environment, Community and Local Government. 

 Pwc were asked to undertake the assessment of the existing structures for the provision of water services in Ireland. Based on their assessment of the current structures, international benchmarks and stakeholder soundings, Pwc recommended that Irish Water be created as a public utility in a regulated environment.

 Under the preferred proposal Irish Water will be allocated full responsibility for all aspects of water services planning and delivery at national, regional and local level. It will be organised for operational purposes on a river basin district basis. It proposes to transfer the water services assets and liabilities of local authorities to Irish Water and it will be responsible for collection of water charges both domestic and non-domestic. It is intended that the income stream from charges will support third party funding with a view to Irish Water becoming self funding over time.

 The assessment looked at a number of models for the management of water services* in Ireland and ultimately recommended that a single national Utility Company was, in their view, the best option for the delivery of water services. 

 This new Utility Company (Irish Water) will see the transfer of responsibilities and functions for water services away from local authorities entirely.  A timescale has been proposed by the Department which sees the establishment of the new utility as follows:-

 2012    -           Project Management Office in Department is established

 2013    -           Irish Water CEO appointed

Local Authorities appointed as agents of Irish Water with responsibility for operational and maintenance of water services

 2015                Irish Water commences taking over water services on a phased basis

2017    -           All operations nationally transfer to Irish Water

 The consultation is seeking views in relation to the following matters:

 ·              the development of an implementation plan for the proposed public water utility. This includes issues arising from an organisation, human resources and environmental perspective in the transitional phase, as well as boundary issues between the proposed utility and other actors involved in the water sector and

 ·              the proposed approach in relation to the future funding of water services including through water charges.

As part of the public consultation process the Department has published the following documents, which are available on its website:

Consultation Paper: ‘Reform of the Water Sector in Ireland’. Department of the Environment, Community & Local Government – January 2012 and ‘Irish Water Phase 1 Report’. PricewaterhouseCoopers – November 2011

 The decision to actually establish the public utility - Irish Water – does not appear to be part of the public consultation invitation although there may be scope to influence the structure and proposed allocation of responsibility.  This new utility would clearly have an impact on the functions of the local authority and on the delivery of water services to the customer in our county.

 The principal concern for Local Authorities will be the efficient operation of such transfer of responsibility as may be directed and that those arrangements are such as to allow the continuance of the effective administration and ongoing operation of local government thereafter.

 The provision of water services has been a core function of the local government system in Ireland for well over 125 years - at least as far back as the Public Health (Ireland) Act 1878. These services have been provided by the Dublin Local Authorities on a ‘not for profit’ basis.

 The Dublin Region has a long tradition of collaboration in the provision of water services and has jointly developed many strategic water and drainage projects which has positioned  the region well in terms of its economic development and quality of life for citizens.  There has been considerable concern about the future of water for the region and significant progress has been made on the identification of a new water source for the region.  Examples of some of the areas where this region acts collectively on areas of particular concern to the whole of Dublin include:-

                           

 ·        The Greater Dublin Water Supply Strategic Study 1996 and review of 2000 detailed the status and priority requirements for water supply across the region (incl. Wicklow and Kildare).

·        The Dublin Water Supply Studies Storage of 2007 assessed and made recommendations regarding the drinking water storage requirements for the Greater Dublin Area up to the year 2031.

·        The Dublin Region Water Services Strategic Plan 2009 is inclusive of the requirements of the other authorities in the region.

·        Regional telemetry system with all authorities having access to all information.

·        Regional GIS system.

·        The Central Laboratory provides a regional service for sampling and analysis of drinking water supplies. It also facilitates the management and monitoring of trade effluent licences and assists in the area of pollution control and the investigation of pollution incidents across the 4 local authorities.

·        Regional network model of the supply system.

·        A Water Steering Group is in place that meets bi-monthly to discuss issues of common interest and to agree regional policy where relevant.

·        A Water User Group is in place and meets bi-monthly to discuss issues of common interest at operational level and to agree how to progress. This group also plays a highly significant role in providing a co-ordinated response to emergencies. The value of the group was clearly demonstrated during the difficulties experienced in 2010 and 2011.

·        Regional approach to raising awareness of the importance of water conservation. The www.taptips.ie website is a regional initiative.

·        Training of staff through common usage of the Ballycoolin Regional Training Centre.

·        DCC provides the maintenance service in the Extra Municipal Area on an agency basis for DLRCC.

·        Management of the network at bulk transfer level is carried out mainly by DCC and FCC to the whole region.

·        The Dublin Major Source Development Study is a regional project with DCC acting as lead authority.

·        The Dublin Region Watermain Rehabilitation Project is a regional project with DCC acting as lead authority.

·        The non domestic Metering Project was a regional project with FCC acting as lead authority.

·        Water treatment is provided to the region with FCC and DCC operating the water treatment plants.

·        High levels of interaction and co-operation occur at operational level.

·        Ringend Wastewater Treatment Plant, operated by a private service provider contracted to DCC, treats the majority of the region’s wastewater.

·        The Greater Dublin Strategic Drainage Study (GDSDS) assessed and made recommendations regarding the long term drainage/wastewater needs of the region.

·        The proposed new orbital sewer and new wastewater treatment plant to be constructed in the north of the region is a project being managed by FCC.

·        A Drainage/Wastewater Steering Group is in place and meets bi-monthly to discuss issues of common interest and to agree policy where relevant.

Notwithstanding all of the areas of commonality and joint working there are still areas of significant difference.  And it does lead to some questions how even greater levels of difference would be dealt with when all local authorities are involved.  Listed below are some examples of the differences in the way in which the Dublin Authorities deal with water services:-

·        While there is commonality in relation to the structures, work practices and conditions of staff in the professional/technical and administration grades there are a number of other grades where there are significant differences between the 4 authorities. At these operational grades each of the 4 local authorities has its own staffing structure, and different work practices.

·        There are differences in the level and extent of experience and expertise across the authorities, for example only two operate water treatment facilities.

·        The age and condition of the water delivery infrastructure varies across the 4 authorities with Dublin City and parts of Dun Laoghaire Rathdown having the majority of older pipes. Levels of unaccounted for water in areas with older pipework are higher and this is reflected in the cost of maintenance and the need for continuous programmes of mains rehabilitation.

·        There are differences in the materials, pipes and fittings currently in use by the authorities in their own areas. 

·        South Dublin County Council and Dun Laoghaire Rathdown County Council are dependant on Dublin City Council and Fingal County Council for bulk water supplies.

·        The consolidated charge for the provision of water and wastewater services to the non-domestic sector is different in each of the authorities.

·        DCC manages a Fats Oils and Grease (FOG) contract  to control the discharge to sewers of these materials  from  commercial  properties  while the other  3 authorities carry it out in-house.

·        There are different maintenance regimes for drainage pumping stations in the different authorities

In the case of South Dublin in 2012, expenditure on water services by South Dublin County Council will amount to €33M, 14% of Revenue Expenditure Budget of €236M. (In net expenditure terms this would amount to €25M which is equivalent to 17.5% of the net revenue account expenditure). The Council has 130 staff members directly engaged on the provision of water services.

 To further contextualize the issue the budgets in relation to Water Services Provision (Division C) in the region is set out below:-

 

 In considering the matter there are a number of key questions which Members may wish to pose for themselves when reading the documents:-

• Should there be any role for local government in the delivery of water services into the future and if so what should that role be
• Is there a particular challenge for local authorities to manage and lead land use planning roles if there is no authority to manage water services
• Will Irish Water become a statutory consultee and be asked to make a report on each planning application that comes into the local authority just as the Council’s Water Services Department do at present
• How would Irish Water “take in charge” water and foul networks in new developments or will they install the networks in the first instance
• If decisions regarding the distribution of and investment in water networks are taken nationally what will the impact be on local authorities’ ability to drive forward economic development opportunities within their own counties (e.g. Pfizer use 1.5 million litres of water daily)
• When water needs to be intensively managed locally to ensure minimum disruption in crisis situations how will decisions be made or influenced by the Members
• Is there an opportunity for cost of water be lower for the consumer if the economy of scale rationale works
• How will billing take place and arrears that are currently outstanding be dealt with
• How will decisions be made with regard to reinvestment in the county’s water network i.e. will the actual amount collected in a county for water be reinvested in that county and how will local leakage and rehabilitation be agreed upon
• How will the installation of water meters be dealt with and if the local authority has a role will that be at full cost recovery including any reinstatement works
• How will immediate crisis works be dealt with i.e. water bursts; sewage issues; impact of flooding
• Will there be a negative impact on local authority payroll where staff do / don’t transfer to the new Utility Company
• How will areas of difference be dealt with
• Will the new Utility Company lead to faster delivery of water services projects including the installation of water meters
• If responsibility for surface water drainage remains with local authorities while all other areas are transferred how will the funding for of this area be met by the local authority
• How will the target of 16% leakage by 2016 be achieved and will counties with low levels of leakage currently have lower levels of investment in their leakage programmes

 Members are asked to consider the consultation papers and to note that views on the proposed reforms can be submitted in writing or by e-mail to:

         Water Services Section

         Department of the Environment, Community & Local government

         Room 1.23

         Custom House

         Dublin 1

         water@environ.ie

 before close of business on Friday, 24 February 2012. All correspondence should be marked ‘Consultation on reform of the water sector in Ireland’.

* water services includes the treatment and distribution of drinking water and the collection and treatment of wastewater