Three Waters Reform

The Gore District Council is calling on the Government to conduct a national referendum to prove it has the mandate to go ahead with the Three Waters reform.

Councillors today unanimously endorsed a submission to the Finance and Expenditure Select Committee opposing the Government’s model for Three Waters reform. However, they acknowledged the current system for financing water and wastewater services needed to change.

Gore District Mayor Tracy Hicks reiterated the Council’s call for a local and central government funding partnership similar to the one with Waka Kotahi NZTA.

“The Council is facing substantial financial challenges to meet rising environment standards, especially around wastewater treatment.

“If our water services were funded under an arrangement similar to the one we have with Waka Kotahi, there is no reason we could not overcome these challenges. Unfortunately, the Government appears impermeable to seriously entertaining an alternative model.”

Given the unprecedented opposition and troubled history of the reform process, the Council urged the Government to hold a national referendum. It could be done as part of this year’s local body elections or as a standalone event shortly afterwards.

“If the Government genuinely believes in democracy and acting in accordance with the wishes of the people, it needs to realise its clumsy approach to the reform process demands a fresh mandate.”

The Council describes the four water service entities, which will oversee the delivery of services throughout the country, as unduly complex and laden with bureaucracy.

“The labyrinth of regional representative groups and panels makes it near impossible to tell how the average citizen will have any reasonable way of wielding a modicum of influence.

“Put another way, the reform proposal will likely create four bureaucratic monsters that will be hard to penetrate and even harder to influence.”

The Council was critical of the Government’s “misleading” advertising campaign to justify the reform, saying it was duplicitous and caused a high level of mistrust within local government.

Trust levels “hit rock bottom” when the Government “unceremoniously dumped” the opportunity for councils to opt-in or opt-out of the reforms, instead legislating it to be mandatory.

The Council defended the quality of New Zealand’s urban water supplies.

The contamination of Havelock North’s drinking water supply in 2016, which the Government has used as the genesis for the reforms, was an extreme case.

“It appears the Government has used Havelock North as its ‘stalking horse’ to suggest other communities in New Zealand have similar contamination risks.

“While we acknowledge some small water schemes may not have the high levels of treatment desired to prevent the infiltration of bacteria and protozoa, urban water supplies in New Zealand are carefully managed, in the main.

“The Government inquiry into Havelock North revealed “incompetence on a grand scale by multiple parties”.

The Council has asked to speak in support of its submission.

New Zealand councils now have certainty around the future delivery of water services following the Government’s announcement today that the Three Waters Reform will be mandatory, says Gore District Mayor Tracy Hicks.

“What we got today was entirely predictable. While it’s not what we (the Council) petitioned for, at least we have certainty at a time when the Council is planning some of the most significant investment in infrastructure that we’ve had to embark on.”

The Gore District will be part of an entity covering the majority of the South Island.

Local Government Minister Nanaia Mahuta said the case for change was strong, and the Government needs to move on the problems.

She thanked local government for its constructive feedback. A joint working party will be set up to look at the common themes from the feedback, she said.

Mr Hicks welcomes the establishment of the working party.

“We now need to ensure it addresses the big issues of accountability, quality of service and where the local voice sits on the regional entities.”

Mr Hicks said Gore District residents had come to expect a high-quality service – “I wouldn’t want to see that standard diluted under the new model”.

The need for reform has been evident for quite some time, Mr Hicks said.

It was unfortunate the disparity of views from local government, misinformation, and party politics undermined the ability to bring those reforms about through a truly democratic process.

The Gore District Council wants Government assurance the local voice will be heard if Three Waters Reform goes ahead.

Councillors last night considered the implications of the reform for the District and the Council’s feedback to the Government, which must be provided by the end of this month.

Gore District Mayor Tracy Hicks said the Government still needed to provide absolute clarity to councils.

“We need more certainty around such issues as protection from the privatisation of water supplies, how much influence will councils have and what can communities realistically expect if their council isn’t on the regional representation group, and local workforce capability.”

One of the concerns raised by councillors was the level of customer service the proposed reform would deliver.

“The last thing we want to see is a call centre in the North Island or offshore. I am sure it won’t happen, but it’s a possibility,” Mr Hicks said.

The reform was one of the most significant issues local government has had to consider for many years – “it’s important communities have all the facts in front of them so they can make an informed decision.”

Chief Executive Stephen Parry said it was difficult to escape the impression “councils in New Zealand are being shepherded into a reform process” without the benefit of all the details.

Mr Parry was critical of the Government’s unwillingness to discuss other options that may not require “such wholesale and radical reform” as the proposed four entities.

He cited the Waka Kotahi NZTA funding model as an option worth exploring. Councils, including GoreDC, have floated the concept during workshops throughout the country.

“If local government had a subsidy arrangement for three waters akin to what happens with roading, most if not all of the current funding challenges before councils would most likely dissipate.

“Based on the limited options on the table for discussion and/or negotiation, the advantages of being part of the reform process appear to outweigh stepping outside and the Council forging its own independent path without any financial assistance.”

Providing feedback to the Government does not commit the Council to a specific stance on the future model for 3 Waters delivery, nor does it commit the Council to continued participation in the reform programme, Mr Parry said.

The Council’s current debt levels, its covenants with the Local Government Funding Agency and the large investment required for wastewater and stormwater separation were also compelling reasons to remain at the table, he said.

3 Waters projects in the Council’s long term debt projections include

• Gore and Mataura water treatment plants upgrade

• Stormwater separation projects totalling $7.1 million

• Water mains renewals $9.2 million

• Wastewater mains renewals $10.4 million

Not factored into debt forecasts was an estimated $60 million to upgrade Gore’s wastewater treatment process to meet new resource consent requirements. There was also the increasing cost of meeting national environmental standards.

“Taking everything into consideration, we could be potentially looking at spending about $300 million over the next 30 years,” Mr Hicks said.

The Council has consistently warned that small local authorities cannot be expected to burden their ratepayers with these costs and would need central government funding support.

Mr Hicks said this is one of the reasons a funding partnership similar to the relationship councils have with Waka Kotahi was attractive.

“Having a central government funding partner contributing just over 50% makes large projects less intimidating and removes the burden from ratepayers.”

Councillors agreed and decided to strongly urge the Government to look at the delivery of water services under a funding partnership model similar to Waka Kotahi NZTA.

Mr Hicks said once there was more certainty around the reform, the Council would be able to have meaningful conversations with the community about the future delivery of three waters services.

“It’s important to remember this is more than a drinking water conversation. Providing stormwater and wastewater services, which comply with environmental standards and community expectations, are going to be costly issues for us.”

Fact Check

• Under the proposed 3WR the Gore District would sit in Entity D, which covers most of the South Island.
• The new entity would take over the Council’s water assets debt of $8.7 million
• The Government will give the Gore District is $9,153,141 to support us through the transition to a new water entity and to invest in community wellbeing.