Rotorua Lakes Council wastewater proposal process slammed by expert

Rotorua Lakes Council building. Photo / Andrew Warner

"About as transparent as a brick wall."

That's how a local government expert describes the process surrounding a Rotorua Lakes Council proposal to outsource its wastewater management to international consortium Trility.

Locals are also taking action, writing en masse to Local Government Minister Nanaia Mahuta asking her to step in to stop the proposal.

Tomorrow the council will decide whether to proceed with the proposal, which if approved would see it enter into a 10-year, $156 million contract with the Trility consortium to manage the district's wastewater services.

The consortium is made up of the Hong Kong-owned Trility, Canadian company Stantec and New Zealand company Fulton Hogan.

The council would not provide details of the contract and the process surrounding the proposal so the Rotorua Daily Post has made an official information request for them.

Council chief executive Geoff Williams said: "This matter will be discussed and a decision will be made by the full council at their meeting tomorrow [July 29]. It would be inappropriate to comment further on this prior to then."

Massey University local body governance expert Dr Andy Asquith said, in his view, there were "significant weaknesses" in the governance process in this case.

Massey University local government expert Dr Andy Asquith. Photo / File

"I don't think that good local governance has been particularly well served."

That was because of the speed of the decision, the underlying rationale for the proposal, and the relevance of the Government's Three Waters reform announcement.

He said it would be "prudent to wait" to see what shape the three waters reform would take.

"It seems a bit hasty to me."

Asquith said having a public-excluded workshop before last Thursday's meeting was, in his view, "bad governance".

"Local government is about engaging with people ... it doesn't smack of trust, faith and empowerment. It's about as transparent as a brick wall."

Local Government NZ principal policy adviser Mike Reid said the organisation didn't take a particular view on specific councils' processes but had confidence in them to follow good process.

Local Government New Zealand principal policy adviser Mike Reid. Photo / File

Generally speaking, "good process" meant elected members were familiar with issues, understood the significance of decisions before them, had access to and understanding of all necessary information and were approaching the decision with an open mind.

Ultimately, considerations as to whether, for example, Government reforms or Environment Court processes could impact decisions, was "up to elected members to make that call, based on the information they have".

When it came to public submissions, councillors weren't legally compelled by the number of submissions for or against but were legally required to take all the information into account. They could then balance that information with other evidence.

Councillor Sandra Kai Fong said the discharge issue for the Rotorua wastewater treatment plant - currently before the Environment Court – was identified as a "real risk" for the Trility proposal and the Trility contract "does not appear" to mitigate that risk.

She wanted to know how the outcome of that process, as well as tendering and building the new treatment plant, would impact the proposed contract.

She said the first briefing councillors received on the Government's Three Waters proposal was on Thursday at the pre-meeting workshop.

"I didn't think that gave us enough information to understand the implications or opportunities we should, or could, consider before entering into a 10-year contract."

Councillor Fisher Wang, who abstained from the vote on Thursday, said he did so as he still had some unanswered questions about the proposal.

"I want to be 100 per cent sure in the decision I made. After the workshop … it cleared up a lot of questions I had but there are still a few aspects of it … that I just wanted cleared up.

Those aspects included how the "unstable political environment" - Covid-19 and civil unrest in Hong Kong as examples - might impact the council's agreement with Trility and the flexibility of the contract to adapt to future Government reform in the sector.

He was seeking answers to these ahead of tomorrow's council meeting and would decide on his position once he had more information.

On Sunday, councillor Tania Tapsell told the Rotorua Daily Post she had voted in support at the committee meeting on Thursday because she saw merits in the proposal but was "continuing to investigate further" and would make her final decision tomorrow.

Councillor Merepeka Raukawa-Tait said some "very good points" were raised in the public consultation stage, regarding the contract, the potential cost of any contract breaches, local employment.

The pre-meeting workshop had provided her with "the assurance I needed to fully support the recommendation", she said.

Raukawa-Tait said the public had many opportunities over the past five years "to become familiar with what was being proposed".

"This is a leadership decision that requires councillors to vote one way or the other. You can't sit on the fence on this one."

Councillor Reynold Macpherson had taken to Facebook to urge Rotorua Residents and Ratepayers followers to write to all council members, the Local Government Minister and the Rotorua Daily Post regarding the proposal.

Rotorua Wastewater Treatment Plant. Photo / Andrew Warner.

Of the 14 emails sent to the Rotorua Daily Post by thisafternoon, 10 opposed the proposal and four requested the process slow down.

Local Government Minister Nanaia Mahuta said the Government had been working with local government on "three waters" - drinking, waste and stormwater - challenges for the past three years.

A Department of Internal Affairs spokesperson said it was up to councils, as owners and managers of water assets, to make decisions on how to deliver water services.

Asquith's comments were put to mayor Steve Chadwick but she did not respond to a request for comment.

Councillor Mercia Yates, supported the passage of the proposal through to the council but did not want to comment.

NO ANSWERS

Ten questions were put to the council, which it would not answer. The questions, which have been resubmitted as an official information request, are below.

Some questions have been edited for length or clarity.

"Trility" refers to the Trility consortium.

• What would happen if the Trility had to withdraw from the contract (once it was signed) - what are the potential costs and or implications of that to the council if that were to occur?
• Will the council make the summary of the contract available to councillors and the public before the council decides on whether to proceed? [Can you please provide it to us?]
• If the council enters into the proposed contract is all financial risk (for example, for all and any shock events) transferred to Trility?
• How much does the council expect Trility's five-year profit to be worth? [If you cannot provide an exact figure, please provide an approximation.]
• What would be the consequences to the council if it decided to terminate or vary the proposed contract (once signed) with Trility?
• Is it possible this could be triggered by an offer from the Government with regard to the proposed Three Waters reform programme?
• What was the original timeline for decision-making on this proposal? When did that change and why?
• What was the purpose of the workshop on the morning of July 23 and why was it scheduled for that date and time?
• Is the council comfortable the timing of the workshop allowed councillors enough time to consider the information presented in the workshop?
• Is the council comfortable that councillors have enough information and time, and that that information is clear enough to make an informed decision?