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Proposed Cardrona Valley Water Supply Scheme

We're proposing to deliver  a new drinking water supply scheme for the Cardrona area.    Here you'll find the latest information about the project. 

Overview What's the latest? Consultation Frequently asked questions Mythbusters

Overview

Queenstown Lakes District Council has a responsibility to ensure its residents and visitors have access to safe and clean drinking water that is affordable and enables growth. 

Cardrona Village is currently serviced by five small private water supply schemes each with permitted water take consents. These private schemes, whether alone or all together, cannot provide enough capacity to supply the long-term demand in the village.

Combining the consents of the existing schemes could service around one third of the long-term demand in the village, so an additional supply will be required to enable the village to fully develop to levels anticipated in the Queenstown Lakes Spatial Plan.

The investors of Mount Cardrona Station (MCS) will be proceeding with a drinking water scheme for the Mount Cardrona Station land which will potentially result in another private drinking water scheme in the area.    

MCS has offered the opportunity to partner with QLDC to build this scheme to a specification that will meet the legislative requirements and in accordance with QLDC standards and operational requirements for the whole Cardrona village.  The proposed scheme is using pre-existing land-use rights and Otago Regional Council consented water permits.

In December 2020, QLDC resolved to delegate authority to its Chief Executive to enter into a Development Agreement to participate with MCS in the procurement of a new community water supply scheme with a connection to the Cardrona Village.

The 2021-2031 Ten Year Plan includes an approved capital budget of nearly $10M for this new Cardrona water supply. The majority of the funding is spread over the 2022-2023 years.

What's the latest?

Detailed work done since the proposed water supply scheme was included in the 2021-2031 Ten Year Plan has confirmed that the scheme will be more expensive to provide than budgeted.

This would see QLDC’s contribution to the scheme rise from $8.5m (plus a further $1.5m outside the 10 year window) to an estimate of $17.5m.

There are a number of reasons for the increased costs, including:

  • Increased construction costs as a flow on effect of the COVID-19 pandemic. This has resulted in cost escalations across the board due to global supply chain disruptions, domestic skilled labour/professional resource shortages

  • Regulatory changes are also affecting project cost estimates. Taumata Arowai–The Water Services Regulator Act came into effect on 1 March 2021. This Act has established Taumata Arowai, Aotearoa’s dedicated regulator of the three waters and Taumata Arowai has introduced new draft drinking water rules. While existing drinking water standards will apply until they are replaced by the new standards (expected around July 2022), the design of new drinking water infrastructure must be future proofed to ensure it meets the requirements that are being signalled.

  • A national-level awareness of potential water reforms have added complexity to the process. Currently it is unknown how Three Waters assets and service delivery will transition to a resulting future model, however design and delivery must be future proofed as much as is reasonably and practicably possible to ensure a new community drinking water supply scheme would be able to meet both the current requirements of QLDC as well as those that are reasonably foreseeable requirements of possible future entities so as to be able to satisfy legislative and operational requirements.

  • As the detailed design evolved there is now a clearer understanding of the cost of providing a suitable water scheme for the Cardrona Valley

  • Cardrona has unique challenges due to the remote location, limited accessibility, high alpine environment, inclement weather, and challenging climatic conditions which contribute increased costs and delivery risk.

Consultation

This increase is considered significant under the QLDC Significance and Engagement Policy 2021. As a result, we are formally consulting the community. 

This will provide the community with an opportunity to make a submission on the proposal to increase the budget to invest in a community water supply scheme for the Cardona Valley.

Following the consultation period, formal hearings will be held and Councillors are expected to consider the outcome of the consultation process and make a decision at the 11 August Council meeting.

Full details about the consultation and how to take part is available at https://letstalk.qldc.govt.nz/increased-investment-in-cardrona-village-water-supply

Submissions close on 18 July 2022. 

Frequently asked questions

  • There is information available to help you understand whether the water you drink every day complies with safety standards, including the Health Act 1956 and Drinking Water Standards New Zealand.

    This can be found on the Ministry of Health website below.    Information specific to Cardrona can be found on page  84 of the 2018-19 report and page 59 of the 2017-18 report.

    Ministry of Health website

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  • The short answer is to protect public health and enable growth affordably.   A new water supply scheme is needed to ensure the whole community has consistent access to safe drinking water that meets legislative requirements.

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  • Reports have been presented to the full Council and the project was included in the 2021-31 Ten Year Plan.  

    10 December 2020 – Agenda Item 12

    The outcomes of the special consultative procedure and a decision to invest will be decided on by Full Council at 11 August 2022 meeting.

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  • Following consultation with the Cardona community in late 2020, Councillors resolved to delegate authority to the Chief Executive to enter into a Development Agreement to participate with MCS in the procurement of a new community water supply scheme with a connection to the Cardrona Village.
    Funding for the project was consulted on as part of the 2021-31 Ten Year Plan which was approved by Councillors in June 2021.

    The cost to deliver the proposed water scheme has increased and subject to approval on 2 June, a formal consultation process will commence (Special consultative procedure). Councillors are expected to consider the outcome of this process on 11 August 2022.

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  • While the scheme boundary is yet to be defined, you'll find an indicative servicing area plan below.

    The proposed Cardrona Valley community drinking water supply scheme consists of new dual abstraction sources in the Cardrona River and Pringles Creek, pumping stations, raw water storage pond to buffer seasonal fluctuations, and water treatment plant with membrane filtration and chlorination.

    Treated water reservoirs will store water with emergency fire-fighting capacity. The scheme will be staged such that the plant is constructed to be scalable to demand and as well to mitigate construction delay risks.

    Initially the water treatment can be serviced from a mobile containerised system initially until sufficient demand triggers further stages of plant to be built, beyond which further expansions for membranes etc will be contained within the permanent water treatment plant. The scheme will embed demand management flow meters from the outset for improved demand management and overall scheme efficiency. The scheme is also being designed and future proofed such that there are options (all parties willing) for integration of the existing Cardrona Village private drinking water supply schemes to join into a single community drinking water scheme in the future.

    The proposed community drinking water supply scheme consists of two pre-existing Otago Regional Council water permits currently owned by Mount Cardrona Station that will vest into Council’s ownership. RM21.628.03 (previously 2009.191.v2) Potable water permit, and RM21.628.04 (previously 2009.435.v1) irrigation permit. Both permits will vest into Council. The drinking water permits have been varied by Mount Cardrona Station to allow for Council as the scheme operator and owner to extend the allowable servicing catchment area to allow to service the township and to also update and extend further scheme boundaries in the future to accommodate growth.

    The water treatment plant, raw water reservoir, rising and falling mains, and treated water reservoirs and associated ancillary infrastructure are all proposed to be constructed on Mount Cardrona Station’s land, with associated land use rights including easements, resource consents, building consents, and will all vest into Council ownership.

    The proposed Mount Cardrona Station subdivision reticulation network will vest into Council ownership, and Council will be responsible for the planning and delivery of the inbound pipeline to the Cardrona Village or other servicing areas.

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  • Yes. The scheme would allow for expansion at a later date. Residents with properties outside of the scheme, but within a serviceable range can apply for a connection. These applications will be considered in accordance with the Council’s Water Supply Boundary Adjustment Policy.

    There will be costs associated with connecting which are also determined by this policy.

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  • The goal is to provide an affordable water supply scheme that is comparable to other small schemes in New Zealand.

    We are currently consulting on a proposal to revise the budget included in the 2021-2031 Ten Year Plan up from $8.1M (with a further $1.5M staged outside the ten-year window) to an estimate of $17.2M. 

    The proposal also requires a corresponding increase to the development contributions to reflect the capital cost estimates and required debt recovery, from $8,490 per dwelling equivalent to $16,490 in the 2021 Development Contributions Policy.  This excludes properties in the Mount Cardrona Station zone which are not eligible for the ‘Small Scheme Subsidy’ of 20% reduction on development contributions.  Properties within this zone would be charged $20,070 per dwelling equivalent.

    More specific information about the potential rating impact can be read in the Statement of Proposal when consultation opens. 

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  • Development Contributions are how Council recover the capital costs and debt funding of the proposed scheme.

    As is standard practice for Council Services, Development contributions for connections to the community drinking water supply scheme will be levied at the usual triggers in accordance with Council Development Contribution Policy 2021 (i.e., at service connection, building consent or at subdivision consent (224c)). Development contributions do not include the private costs to connect which are to be borne by the applicant, these may include council service application fees; professional fees (e.g., design, survey) or construction services (e.g., plumbing costs).

    For properties within the existing township there is a limited time option to amortise the cost of the development contribution over 30 years at 4% interest (loan fund the upfront payment over long term period) using a Targeted Capital Water Supply Rate.

    The Targeted Capital Water Supply Rate is estimated to be $1,100 p.a. This option will be available to any properties in the village that sign up to the Targeted Capital Water Supply Rate within the first rating year of council ownership of the scheme (Estimated deadline 1 July 2024).

    Rating is how council recovers the operating and maintenance costs.

    As is standard practice for Council Services, the revenue from rates is used to fund the operating costs associated with providing the community drinking water supply services to Cardrona.

    Rates include the following:

    The Cardrona Water Supply Rate (est. $800 p.a.) will be levied on serviced (connected) rating units, and

    Availability Charges are levied at 50% of the full rate (est. $400) and will be levied on serviceable rating units (located within 100m of Council services but not yet connected) except for those properties expressly excluded*.

    *The above operating cost funding approach is standard in accordance with Council’s usual policies and practices. However, unique factors that apply to this proposal for a community drinking water supply scheme in Cardrona are that availability charges will not be levied on any serviceable rating unit (within 100m of but not connected to Council community drinking water supply service) that is currently connected to the existing private water schemes owned by Cardrona Water Supply Limited and Cardrona Limited.

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  • If there is a building in multiple ownership with differing uses, each owner will have their own ‘individual point of supply’ agreement with QLDC. This will require separate connection fees and development contributions, and will be rated separately as there are separate connections to the network. 

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  • Once the scheme boundary is confirmed, residents with properties outside of the scheme boundary, but within a serviceable range can apply for a connection.  These applications will be considered in accordance with the Council’s Water Supply Boundary Adjustment Policy.

    The costs will differ depending on the property, these will be determined by the above policy.

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  • The goal is to reuse and repurpose as much of the existing infrastructure as possible to reduce the overall capital cost requirements of providing a safe and secure community drinking water supply scheme, but also to mitigate any resulting potential duplication of costs to connect to council services. 

    However, QLDC does not own any of the existing drinking water supply infrastructure (pipes, reservoirs, pump stations, treatment plants or associated ancillary infrastructure) in the Cardrona area so the ability to use any of the existing pipes relies on the various existing private drinking water supply service provider’s (their customers as well as their owner/directors) willingness to vest their infrastructure in Council at an agreed value and in accordance with the QLDC Three Waters Vesting and Acquisition of Private schemes policy.

    While re-use of existing infrastructure could help to reduce the overall capital costs of the project and resulting development contributions, or potentially reduce any excess duplication of costs to connect to council services for some currently serviced a private scheme, it won’t eliminate them completely.

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  • Private scheme owners are invited to negotiate an agreed value to vest their schemes in Council or make proposals to integrate with the proposed new community drinking water supply scheme, at any time.

    This can be done in accordance with the QLDC Vesting and Acquisitions of Private Schemes policy and the process addendum that explains requirements in more detail.

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  • Reports have been presented to the full Council and the project was included in the 2021-31 Ten Year Plan.  

    1. 10 December 2020 Full Council Decision

    2. Full Council Decision on 2021/2031 Ten Year Plan – June 2021

    3. 2 June 2022 Full Council Decision

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  • Following consultation with the Cardona community in late 2020, Councillors resolved to delegate authority to the Chief Executive to enter into a Development Agreement to participate with MCS in the procurement of a new community water supply scheme with a connection to the Cardrona Village.

    Funding for the project was consulted on as part of the 2021-31 Ten Year Plan which was approved by Councillors in June 2021.

    The cost to deliver the proposed water scheme has increased so the project is now the subject of a formal special consultative procedure.  Submissions are open and can be made any time between 3 June 2022 and 5.00pm 6 July 2022. 

    Submissions will be heard by a subcommittee of Councillors on 14 July 2022.

    Councillors are expected to consider the outcome of this process on 11 August 2022.

    Council officers will continue to meet with the Cardrona village CVRRS through the process to update on any new information.

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  • QLDC will stage capital investment by only building what is needed, when it’s needed to avoid over capitalising on day one.  For example, piping water to the village will not be affected if growth is slow at Mount Cardrona Station. 

    Operational costs (which include maintenance and depreciation) will be funded by those who pay rates to use the services and applicable serviceable properties.

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  • Information on how QLDC source, treat and deliver drinking water in our district is available on the website.

    QLDC Three Waters Level of Service can also be be found in the Three Waters Asset Management Plan on the website.

    Council level of service provides for consistency in the delivery of drinking water supply across the district. Key performance indicators are used to define and provide a measure on parameters such as flow and pressure, firefighting capabilities, water quality, compliance and response times.

    Levels of service and the corresponding costs to deliver them vary between Council and private service provider schemes. Higher levels of service come at a cost. The proposed Cardrona Community Drinking Water Supply Scheme will provide to Council’s level of service.

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  • Look beyond the tap to know what level of service you currently get to help better inform the perception of cost and value to you, your family and friends, visitors and customers.  

    The service you receive is as much about how your water service is operated to ensure that the water you, your family and friends, and your customers are drinking is safe and reliably delivered it to you in accordance with all of the legislative requirements and is continuing to be invested in to keep up with change rules, regulations and standards.

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  • The goal is to achieve a fully integrated public water scheme for Cardrona.  This involves working closely with all private scheme holders.   QLDC does not currently hold a water permit in the Cardrona area so working with another permit holder is a crucial step to achieving this goal.

    The investors of Mount Cardrona Station are one possibility for achieving this goal, offering an opportunity to collaborate with Council to achieve a safe and secure drinking water for all Cardrona residents that meets legislative requirements, rules and standards.  We are happy to hear from any other permit holders who are interested in working with QLDC to help achieve this goal and to progress discussions in accordance with the QLDC Three Waters Vesting and Acquisitions of Private Schemes policy.

    QLDC has also successfully worked with MCS to deliver a new wastewater scheme to service the Cardrona Village, the MCS plan change zone and the Cardrona Alpine Resort (CARL). Shovel ready opportunities in the current construction and labour markets provide affordable means to deliver core infrastructure. 

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  • All public water schemes require pumping water uphill to be stored in reservoirs to ensure a minimum level for firefighting capacity is always maintained in the event of an outage, power failure or emergency event.  This is best practice and has been consistently required from every new development through the QLDC Subdivision and Land Development Code of Practice.

    So no matter what elevation you live at, it is a QLDC requirement to have water pumped up to a storage location.  Note that existing schemes in Cardrona also currently pump water uphill so this wouldn’t be a change in the way water pressure and storage services are currently provided for using gravity.

    Locating the treatment facility near the storage facilities also reduces the potential for contamination in the treated water conveyance lines and locating assets together helps minimise maintenance and operations costs of facilities.

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  • In this circumstance, this is your own decision to make and there will not be a requirement to connect to the community drinking water supply scheme. 

    For properties within the existing township there is a limited time option to amortise the cost of the development contribution over 30 years at 4% interest (loan fund the upfront payment over long term period) using a Targeted Capital Water Supply Rate.

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  • Yes.  For irrigation purposes as per the requirements of the Mount Cardrona Station Special Zone rules in the District Plan.

    District Plan rules:

    The Mount Cardrona Station Design Guidelines also includes a section around water efficiency, requiring a number of design features to ensure buildings within the zone can reduce long term water use in an area where there can be water supply constraints.

    Mount Cardrona Station Design Guidelines 2017

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  • The current seasonal flow rates can be requested from the Otago Regional Council.  However it’s important to note that the proposed scheme relies on already permitted water takes.  This proposal is not seeking to extract additional water. 

    QLDC must comply with the conditions of any water permit it acquires ownership of.  If QLDC does acquire water permits from multiple consent holders, there are opportunities to improve ecological impact through combined demand and peak flow design and management to use less water more efficiently under one operator.

    The Otago Regional Council manage water catchments and permits.  You can see all of the existing permits on their website:

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  • As highlighted above, there is no proposal to increase water take. 

    Going forward this will become increasingly important.  Reducing the number of independent schemes and private bores into a concentrated and well managed community drinking water supply scheme will support availability and improve management of water for generations in the area for generations to come.

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  • As highlighted earlier, all public water schemes require pumping water uphill to be stored in reservoirs to ensure a minimum level for firefighting capacity is always maintained in the event of an outage or power failure.

    Power outage is highly probable in a large scale emergency event which is why all QLDC managed critical services have onsite generators and diesel storage to provide emergency standby power.

    However, an event such as an Alpine Fault failure is likely to bring temporary pipe breakages and contaminated water.  That’s why it is so important that residents have plenty of clean water in their emergency kits, enough for cooking, drinking and cleaning for every person in your household for at least a week.

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  • Yes. This is an important requirement of any public water scheme.

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  • This has been a requirement either because there was not sufficient storage capacity in the connected or available reticulated water supply scheme, or there was not an available reticulated water scheme to connect to.

    Mount Cardrona Station intends to provide the necessary firefighting storage for the MCS development in the reticulated system that is proposed for the MCS development.  

    Currently there are parts of the village that do not have adequate firefighting capacity.  A community water supply scheme for Cardrona will mean firefighting capacity in the village could also be centralised and improved.

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  • While the details are still to be worked out in the design – Cardrona can expect an early implementation of the results from the smart water meter trials underway in Glenorchy and Luggate.  You can read about the trial here <link to project page>

    The proposal for Cardrona considers the sensitive catchment and scarcity of water in a high country alpine environment and seeks to ensure that demand management is implemented on day one of operations.

    Charging in accordance with QLDC Integrated Three Waters Bylaw 2021

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  • All private infrastructure must be designed in accordance with the QLDC Subdivision and Land Development Code of Practice. The infrastructure will be designed to use as much passive protection as possible (underground or insulated services) to reduce operating costs. But where required exposed pipes at risk of freezing will be heat-traced with active electric units.

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  • As already highlighted, there is no proposal to take additional water. The proposed community water scheme will be within existing water permits. Council will operate within the conditions of any existing permit or consent it acquires.

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  • The design basis has allows for 1,000 to 1,150 L/day/household to service the ultimate demand.

    Use of flow meters for volumetric charges  are still being investigated. Therefore, at present the operating costs will be presented as an annual rate (which may be levied volumetrically in future).

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Mythbusters

There has been confusion on some aspects of this proposal that need to be clarified.   Below we address some of the ‘myths’ we’ve heard so far.

  • The Council is not underwriting any costs and there is no loan proposed.  However it is possible there has been a misunderstanding around discussions on the small scheme subsidy.    The Cardrona Village can receive the 20% small scheme subsidy whereas Mount Cardrona Station is not eligible for this.   

    The term ‘interest’ has only been used in connection with development contributions and the payment plan options which is addressed above in the section relating to costs.  Any interest would be applied consistently in accordance with QLDC’s usual processes and policies.

    If the Council chooses to collaborate on this project, it will contribute to the costs along with the investors of Mount Cardrona Station.   Any benefit to the developer would be in proportion to its contribution to the project. 

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