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Project Watershed addresses the issues of flood protection, soil conservation and river management in the greater Waikato River catchment. The catchment includes the Waikato and Waipa rivers as well as smaller rivers, such as the Whangamarino, Maramarua and Mangawara. Project Watershed incorporates the existing Lower Waikato-Waipa Control Scheme, the Lake Taupo, Reporoa, Paeroa Range, Waitomo and Karapiro/Arapuni Catchment Control Schemes, as well as ‘local’ flood protection works currently managed and funded by territorial local authorities.

Feedback received during the consultation process indicated that the objectives of Project Watershed required to be more fully explained. Through Project Watershed Environment Waikato sought to:

• Prevent deterioration of flood protection assets so as to avoid loss of land productivity and a reduced level of flood protection for rural and urban properties.

• Ensure, within the limits of efficiency and fairness, that rating for flood protection within the Waikato/Waipa river catchment recognises all beneficiaries and all those whose actions or inactions contribute to the need for expenditure on flood protection systems.

• Maximise the effectiveness and efficiency of water quality, soil conservation, flood control and land drainage activities within the Waikato and Waipa River catchments, and minimise inefficiencies caused by inappropriate actions or inaction. With respect to water quality, Project Watershed’s primary objective is management of sediment. However some protection activities, such as riparian fencing to exclude stock from waterways, will also reduce pathogens in water bodies.

• Provide a consistent framework for landowners and communities to be protected from flood damage in the flood plains of the major rivers, to a cost-effective standard agreed with the affected communities of the Waikato/Waipa catchment.

• Achieve and maintain stable river and stream channels and banks within the Project Watershed catchment, and ensure that inappropriate drainage or tributary management activities do not compromise scheme standards.

• Ensure effective control of accelerated erosion within the Project Watershed catchment.

• Ensure that where there are significant contributors and beneficiaries elsewhere in the catchment, Project Watershed activity is not hindered by an inequitable financial burden on individual landowners.

The Region covered by Project Watershed is geographically diverse (See map 1, previous page). It is made up of a range of different soil types and has some unique features, including large wetlands, large man-made dams, lakes and peat lakes. What happens in one area of the catchment can directly affect what happens in another. For example, soil erosion issues in the Waipa catchment can contribute to sedimentation in the Waikato River and flooding in the Lower Waikato.

At the beginning of the Project we estimated a current funding deficit of $1.3m per year and that Government funding was at risk. After two years of consultation this figure has remained approximately the same. Environment Waikato has been seeking a long-term, sustainable and equitable process to fund maintenance of existing assets, and also to fund new work required by the community. Formal work on this project began in 1999. It involved seeking solutions to issues through a 'whole of catchment' approach, rather than, managing specific parts of the wider catchment as smaller, independent management zones. Project Watershed is a significant project for Environment Waikato. It sits under the general framework of Council’s Strategic Plan along with a number of other significant projects, such as the Taupo Water Quality Project and Riparian Management strategy (Clean Streams). This is illustrated in Appendix 2.

It is expected that rating levels indicated in this document would remain relatively constant over the next five years, unless a major disaster occurs or there are substantial increases in the rate of inflation.

Changes to the programmes and Funding Policy outlined in this document will be subject to Council processes, which will ensure that consultation occurs.

Existing assets will be reviewed through regular Asset Management Plan reviews.

A comprehensive analysis and justification, including a site-specific review of funding policy, will be prepared for significant new works. These will be presented to the community for consideration, to liaison subcommittees for recommendation and to Council for approval.

Other less significant new works will be presented to the relevant liaison subcommittees and Council annually for consideration within the project budget constraints.

Project Watershed's funding policy development has been guided by two key pieces of funding legislation - the Local Government Act 1974 Part VIIa (as amended by the Local Government Amendment Act 1996 (LGAA)) and the Rating Powers Act 1988 (RPA). Under this legislation, Environment Waikato is obliged to consider who benefits (both directly and indirectly) from the work to be undertaken, as well as who contributes to the need for such work.

The Funding Policy has been developed through consultation with the community. It is markedly different to the original proposals put out for comment in 2000. In particular, the soil conservation element reflects the feedback received from the community about the degree and the timing of works, while the flood protection and river management component has increased in response to requests for new works.

Environment Waikato has involved a number of technical experts to assist in the development of this Funding Policy. In addition, it has worked closely with representatives from throughout the greater Waikato catchment via formal liaison subcommittees each representative of a specific geographical area of the wider catchment; and termed a management zone. It has also consulted with significant stakeholders such as territorial authorities, farmer representatives, drainage boards and key concerned interests. Community input was invited through a broad consultation programme. Participation was invited via circulars to households, regular press releases and a comprehensive advertising campaign during the formal consultation phase.

The programme approved by Council has changed significantly as a result of consultation. Originally four programme options were proposed ranging from $3.1m per year for existing Environment Waikato services to $6.4m per year for a full proposal. The option suggested by Environment Waikato was valued at $6.2m per year. A programme valued at $5.8m per year was eventually included in the draft consultation document and the programme finally approved by Council amounts to $5.5m per year. The adopted programme includes approximately $1.2m of works previously funded by other agencies.

Project Watershed is concerned with three things. River management involves active involvement in river processes to ensure rivers and streams are stable and flow appropriately. Work proposed under Project Watershed includes some routine river maintenance works across all rivers and streams, as well as more major river improvement initiatives in targeted locations.

Soil conservation is the management of land to maintain soil and water resources, and provide the widest range of sustainable benefits in the long term. Soil conservation proposals have caused considerable debate during the consultation process. Environment Waikato has considerably reduced the proposed erosion control programme in the Middle Waikato, Waipa and Lower Waikato management zones. Environment Waikato has however, increased the programme for both the Middle Waikato and Lower Waikato management zones as the programme recommended by the liaison subcommittees was considered insufficient to meet even the highest priority needs of the zones.

Council has developed a complementary but distinct riparian strategy to address non- point-source discharge pollution via surface runoff and ground water. Further discussion of the relationship between Project Watershed and the Riparian strategy (Clean Streams) can be found in Appendix 1 of this document.

Flood protection is that work which protects land and assets from natural flood events. The majority of the flood protection work considered under Project Watershed is in the Lower Waikato management zone, however there are also significant works proposed for the Tauranga - Taupo and Tongariro rivers as well as in the Otorohanga area.

Overall

To maintain all existing schemes and protection works across the whole catchment and to undertake recommended additional works, the programme is estimated at $5.5m per year for the next five years. This assumes no major disasters or substantial increases in inflation.

A number of funding mechanisms have been considered during the development of the Funding Policy for Project Watershed. These include general (regional) rate; the greater Waikato catchment, management zone and contributor differentials; direct benefit differentials; and direct charges.

Council also considered whether rates should be collected by land area, land value, capital value, direct charges, or through contractual agreements. Its decisions are set out in Appendix 6 of this document and detailed as Funding Policy in section 16.

The effect for the average ratepayer not within a direct flood zone is around $10 - $15 per $100,000 capital value, although this will depend on the land value of the property. A table of rates by management zone is shown in section 18.2.