PM Chris Hipkins and Local Government Minister Kieran McAnulty scrap a major part of the unpopular Three Waters reforms, ditching the four mega entities that would have delivered Three Waters services to households. Video / Mark Mitchell
Bay of Plenty leaders are disappointed councils will miss out on millions of dollars after changes to the Three Waters reform.
Tauranga City Council was set to receive $48.4 million in ‘better off’ funding and Western Bay of Plenty District Council would have received $21.3m.
Under the changes, the second tranche of funding has been cancelled so the city council will receive $12.5m and the district council will get $5.34m.
Tauranga City commission chairwoman Anne Tolley and Western Bay mayor James Denyer said they were disappointed with the move.
Tauranga had allocated its better-off funding to the $304m civic precinct Te Manawataki o Te Papa, while Western Bay had yet to allocate the second tranche of funding.
Last week, the Government announced changes to Three Waters, now rebranded as Affordable Water Reforms. Under the changes, the management of wastewater, stormwater and drinking water would be handled by 10 regionally-based entities rather than four. The start date was pushed back two years to July 2026 at the latest.
The Bay of Plenty will have its own entity comprising Tauranga City, Western Bay of Plenty, Rotorua Lakes, Kawerau, Ōpōtiki, and Whakatāne.
Tolley said the removal of the second tranche of funding for councils was disappointing, but accepted the creation of 10 smaller regional entities would mean some advantages of scale would no longer be available.
Tauranga City Council commission chairwoman Anne Tolley. Photo / Alex Cairns
”While the better-off funding was earmarked as a contribution towards Te Manawataki o Te Papa, it was only one of the numerous streams of funding available to match the rated portion of the civic precinct development costs,” she said.
”A comprehensive plan will be presented to [the] council later this year that details how the development will be funded and the announcement made by the minister will be taken into account.”
Denyer echoed Tolley’s disappointment and said the second tranche of funding “would have allowed [the] council to spend a meaningful amount of money in our district to improve the wellbeing of our community”.
”It’s a lost opportunity for us, but [the] council had not considered in any detail precisely how this money would be spent, so we were not banking on this money for any project in particular.”
Western Bay allocated its $5.34m of first tranche funding to an elder housing village redevelopment on Heron Crescent in Katikati.
Both Tolley and Denyer welcomed the shift to regional-based entities.
Western Bay of Plenty District Council mayor James Denyer. Photo / Supplied
Tolley said: “The process for councils to represent their communities’ interests in the governance of the smaller entities will be much more straightforward and that is a positive outcome for all Bay of Plenty councils.”
Denyer said: “Providing every mayor of every local authority with a seat at the table of their respective entity will guarantee the priorities of local communities are heard and make it easier to retain a local workforce.”
Tolley said councils’ concerns about the lack of detail in stormwater service delivery and assets had yet to be addressed.
She said it was “unfortunate” there was no cross-party agreement on the shape of water services reform going into the election process later this year.
“That means that there is a risk that councils will be wasting their time, efforts and ratepayers’ money on a process that could be substantially revised, if not reversed, by a future government.”
Responding to the leaders’ concerns, local government minister Kieran McAnulty said the Government decided not to move ahead with the $1.5 billion second phase of better off funding to meet the additional costs of establishing ten entities.
It was also to ensure the new entities had the ability to borrow for investment, he said.
”Because $1b of the better off funding was to have been provided by water services entities borrowing, this will free up the same amount for the entities to invest in their drinking water, wastewater and stormwater networks.
”The remaining $500m which was to be funded by the Crown will instead be used to help offset the higher costs of transition and entity establishment.”
The $500m “no worse off” funding package would remain, which would help ensure no council was left worse off as a result of the costs and financial impacts of the transition process, McAnulty said.
Under the reforms everyone would be “economically better off” as a result of these changes versus doing nothing, he said.
”Our new approach will still make clean water more affordable, saving ratepayers on average $2770 to $5400 by 2053, and still keep a lid on future rate rises.
”Evidence shows us inaction could see ratepayer’s water bills balloon to $4230 to $9730 per household per year by 2053.”
Government data showed the estimated average cost per household for water services would be $6130 in Tauranga City and $6980 in the Western Bay of Plenty in 2054 under the current model.
With the regional entity model, the average cost for each household in the Bay of Plenty region would be $2780.
This equates to a saving of $3350 in Tauranga and a $4200 saving for Western Bay homes.
