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Letter: Getting a straight answer …

Thursday 20 June 2024 | Written by Supplied | Published in Letters to the Editor, Opinion

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Letter: Getting a straight answer …

Dear Editor, Getting a straight answer from the water authority is like pulling teeth.

The Act sets out to provide To Tatou Vai (TTV) with financial independence. Section 26(8) details that funds are to be derived from five potential sources: charges, tariffs, the Crown, contributions from CIIC, and income from water contracts.

CEO Tereapii Timoti says the Te Mato Vai infrastructure asset will be transferred to TTV “in the 2024/25 financial year” (Letters, 4 June).

Accounting standards require assets to be depreciated. Quoting the TTV Act, “Any funds received that are allocated to depreciation must be held in a reserve account...”.

Yet the CEO claims there is “no requirement” to pay depreciation of the infrastructure asset to a reserve (Letters, May 27).

Can the CEO explain how the Te Mato Vai asset is exempt from section 26(7) of the Act?

And, if To Tatou Vai are required to pay depreciation of the Te Mato Vai asset to a reserve, how will this be funded?

Te Vai Ora Maori

Reply – Mr Kirkwood’s (Te Vai Ora Maori) earlier complaint was that the depreciation of TTV infrastructure would be factored into the tariff.  We responded that this was incorrect except for capital equipment depreciated for assets less than five years period.

The bulk of the water infrastructure has a depreciation period far beyond five years.

Mr Kirkwood is correct in saying it is anticipated that infrastructure will over the next year be transferred from MFEM to TTV.

Mr Kirkwood is correct in saying that MFEM must maintain a depreciation reserve as current owner of those assets.

This situation remains when the infrastructure is transferred to TTV. 

Currently for assets with a depreciation period of less than five years the depreciation is recorded in the P&L. 

Once again, I offer the Te Vai Ora Maori letter writer/s an in-person briefing.

Tereapii Timoti

CEO

To Tatou Vai