Responsibility for drinking water is likely to under big changes. Photo / Getty
The Government says its plan to take over water infrastructure from councils could save Bay people thousands in rates.
Yesterday the Government announced more detail on its sweeping national reforms in part prompted by underinvestment in water infrastructure by some councils.
It proposes to establish four publicly-owned entities to take responsibility for drinking water, wastewater, and stormwater infrastructure throughout New Zealand.
The Three Waters Reform Programme is expected to save ratepayers thousands of dollars and help deliver $120b to $185b of investment.
Bay of Plenty councils are included in Entity B - consisting of 22 districts throughout Waikato, Taranaki and the Bay.
Data from the Department of Internal Affairs shows the average Rotorua household's yearly contribution, on average, is $1010. Without the reform, this is projected to soar to $3400. But with the reform coming into play the cost would be an estimated $1220 instead.
For Tauranga residents, the average household pays $1350 already. This is expected to climb to $3060. However, the Three Waters intervention would mean the average household would pay just $1220 instead.
The average Western Bay of Plenty household pays $2150 a year. Without the reform, this was expected to nearly double to $4050. Under the reform, Western Bay ratepayers would pay $1220.
Local Government Minister Nanaia Mahuta said the case for change was compelling as the average household bill could be as high as $9000 by 2051.
The up-to $185b of investment that was desperately needed was a cost most local councils simply could not shoulder on their own, she said.
Three Waters proposes to establish four publicly-owned entities to take responsibility from New Zealand's 67 councils for drinking water, wastewater and stormwater infrastructure. The entities would also take on each council's debt.
The entities are proposed to be set up by mid-2022. However, they are not expected to be operational until mid-2024.
Councils concerned at the reform have until November to opt out.
Mahuta said the reform was expected to grow the national GDP by $14b to $23b over the next 30 years and generate 5850 to 9260 full-time equivalent jobs.
"Without this change, communities are going to either face very large bills for water services or infrastructure will continue to degrade, with ongoing health and environmental consequences. Both of these outcomes are unacceptable."
Mahuta said the existing system that provided most of the country's three waters services was "ineffective, inefficient and not fit for purpose".
"Underinvestment, including deferred maintenance and renewals expenditure, has left a legacy of impending costs and poor services for future generations," she said.
Mahuta said the Government would continue to work with the sector, iwi and industry and there would be more announcements to come, including a three waters reform support package for councils and their communities.
The reform comes after the establishment of Taumata Arowai, a new independent water services regulator that was created following the 2016 Havelock North water contamination incident.
Department of Internal Affairs data shows Rotorua Lakes Council's current percentage of investment to keep up with depreciation from 2021 to 2030 is 36 per cent, compared to Tauranga City Council's 35 per cent and Western Bay of Plenty's rate of 58 per cent.
A lower figure means a council is spending less on repairing and refurbishing its assets than the rate at which those assets are depreciating.
When asked whether the council had done a good job of investing in the area in recent years, Rotorua mayor Steve Chadwick said the organisation had proactively elevated infrastructure investment "and that will continue with $424 million of investment ... planned across the next 10 years."
"As a council we have recognised the need to address infrastructure challenges and have worked on this progressively and proactively during recent years," Chadwick said.
"Recognition of a scarcity of skills and ageing wastewater infrastructure resulted in a partnership with the Trility consortium to manage and maintain wastewater infrastructure. We continue to make good progress on wastewater reticulation in our lakes communities, we are progressively renewing our stormwater network and have upgraded all our district water supplies."
Chadwick said the council was "adamant" it did not want to lose the role of local leadership and directions to ensure any changes don't compromise existing partnerships to achieve good outcomes that benefit the whole community.
"Relationships matter."
"There's no doubt there would be advantages from the changes proposed and we need to continue to be involved in the discussions to enable us to negotiate on behalf of our community. We need to take Te Arawa's interests into any negotiations."
Deputy chief executive infrastructure and environment Stavros Michael said the council had 27 FTEs in the Three Waters team and he anticipated staff to eventually transition to the new entities.
President of Local Government New Zealand Stuart Crosby said he has been involved with Three Waters discussions "at a high end" for the past 12 months.
Crosby said the country's 67 councils were effectively in three camps; complete support for Three Waters; those vehemently opposed, and those who liked the concept but had reservations.
Concerns already highlighted include what influence smaller councils would have on the water entities; the potential for privatisation; and the likely loss of revenue from council losing this arm of the business.
Crosby said mechanics were already in place to ensure smaller councils were heard and the Government was "going to some lengths" to prevent the threat of privatisation.
These were expected to be addressed in design aspects of the reform, expected to be released during the next several weeks.
Crosby said the organisation was trying to shop for the best outcome because "we know our communities best".
"We support the independent water regulator. We support the amalgamation of water supplies, provided it's voluntary. We believe there's a case for change, but in saying that we respect each council's position."
When asked whether some councils desperately needed such reform, Crosby said many "growth councils" were looking at it favourably.
Tauranga City Council director of city waters Stephen Burton said: "We are in a fortunate position in Tauranga, where our council has invested prudently in water infrastructure and will continue to do so".
Western Bay of Plenty mayor Garry Webber said there were no negatives with the reform and "local government just has to accept that is what it is".
Webber agreed the reform reflected a general lack of underinvestment "by many councils".
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