Wellington Water asks for more millions to get house in order

Wednesday, 5 February 2025

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Wellington Water has asked Wellington City Council for millions of dollars in order to put its house in order.

New Wellington Water chief executive Pat Dougherty sat down with the city council at 4pm on Tuesday to ask for an extra $25 million in capital spending and $6m more in operational spending - an increase respectively 40% and 10% more than originally budgeted for the next financial year.

The council, one of the shareholders in Wellington Water, has a week to decide whether or not to accept the request in its annual plan. Where the money would come from would depend on whether the council wanted to slash more projects, or to increase its self-imposed debt-to-revenue ratio.

“The amount of money that we're asking for is only a small fraction of what's needed to start tackling the issues. All we're asking for is enough to keep the critical systems running,” Dougherty told councillors.

He said the water company was too reliant on its consultants and contractors.

He acknowledged the council had already told the utility this and said: “you were right, and I'm sorry it's taken so long for the message to be heard.”

Thirty in-house consultant and contractors would be replaced in any restructuring of the water company. Ten new roles would be created within contract management and asset management.

Dougherty said the replacement of the roles would slow down upcoming projects.

“We probably aren't going to deliver all of our capital budgets this year, but we think that's where our focus should be.”

The IT systems set up more than five years ago had not been refreshed, he said. The company relied on Fulton Hogan and Veolia for their asset management systems and did not have their own financing or budgeting system.

Dougherty said the reason the numbers for the meeting were late were due to the long time it took with their system to extract information.

The company was advertising for a chief operating officer, to straighten out ineffective reporting lines.

Many councillors around the room thanked Dougherty for his honesty about the organisation.

Sarah Free said she felt she did not have enough access to the organisation’s spending, which made it hard for her to be confident about the money it asked for.

“What’s been going on with all of our millions?”

Iona Pannett said over the many years she had seen similar accounts about the organisation’s structure.

“Is that really the answer, if we keep fiddling around with the structure it will improve?”

It was a step in the right direction, Dougherty replied.

“All I’m trying to do is get these serious flaws fixed so the next organisation can hit the ground running.”

The funding question was asked in a day of back-to-back meetings, where elected officials met for the first time after the long summer break to discuss rating valuations, the annual plan, the new water entity and Wellington Water’s request.