Saturday, December 2, 2023

DoC’s eye-watering easement fees strike again

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Gap between expectation and DoC quotation almost 1000%.
Amuri Irrigation Company in North Canterbury proposed a small scheme on the south side of the Hurunui River.
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Another irrigation company has been quoted an eye-watering increase in easement fees by the Department of Conservation.

The Amuri Irrigation Company in North Canterbury proposed a small scheme on the south side of the Hurunui River that required three easements over Crown land, assessed at a charge of $1600 each or $4800 in total.

Sara Black, the company’s business services manager, said the Department of Conservation (DoC) calculated the levy on each of the 30 properties that would benefit, coming up with a total of $45,000, nearly 1000% higher than expected.

The scheme did not proceed for this among other reasons.

Black said the experience shows DoC is taking a different approach to how it calculates such fees.

She said DoC staff told her a recent court ruling on charging for easements servicing a residential subdivision supported the department’s ability to charge for each benefitting property as opposed to levying one charge.

This approach could substantially increase easement charges throughout the country, she said.

The DoC’s director of regulatory services, Steve Taylor, said he is not aware of any legal precedent, but said fees are based on each benefitting property.

“This is based on our pricing policy and application of valuation principles, rather than legal precedent.”

Details on the DoC website state that where an easement services more than one lot, the fee will be calculated by multiplying the relevant easement fee by the number of lots or beneficiaries the easement serves.

That fee depends on both the nature of the activity, be it access or utilities, and whether the applicant or beneficiary is commercial or not.

This appears to be recent policy, given both the Amuri scheme and the Otekaieke Community Water Company (OCWC) have potentially faced substantial increases in easement fees in the past 18 months.

The 23 members of the OCWC in North Otago faced an initial increase for a 0.085ha easement from $300/year to $32,678.

The easement provides non-potable water from the Otekaieke River for use as stock water, gardens and small-scale irrigation.

The DoC initially claimed the users were “all undertaking commercial activities”.

After consultation about their actual activities, this was reduced to $14,548. Following further discussions it was further lowered to $3663.

The DoC has refused to supply details on its price-setting methodology, a decision that Federated Farmers is appealing to the Ombudsman.

Taylor told the Farmers Weekly last month that as part of a regular review, it found the fees being charged for the OCWC easement were not consistent with its policy.

Taylor said while the department works through details with concession holders it will charge the existing fee.

An independent valuation and external advice have been commissioned to advise on guidelines for irrigation water schemes with multiple beneficiaries. 

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