Three Waters: Whanganui District Council may face significant costs of water reforms

Whanganui District Council officers have produced an extensive report on the Government's Three Waters Reform proposal during the current pause. Photo / Bevan Conley

Water reforms could be on the way whether or not councils opt into the Three Waters Reform Programme, a senior council officer says.

Whanganui District Council's chief financial officer Mike Fermor said it was important to consider the big picture and the national price tag of $120 billion to $185b over 30 years to deliver safe drinking water, swimmable rivers, resilient water networks, and improved environmental outcomes.

"Everybody wants that," he told Tuesday's council meeting.

"We've had the opportunity to engage with the community and for elected representatives and council officers to work through the [Three Waters] proposal in order to provide feedback to the Government."

The council, along with 66 other local authorities nationwide, has been given a two-month pause to consider the Three Waters proposal ahead of a promised Government announcement on September 30.

The council's officers and elected representatives have been using the time to consider information released by the Government and Local Government New Zealand (LGNZ).

The Three Waters Reform would see the transfer of water supply, stormwater and wastewater management from individual councils to four amalgamated water service entities which would be owned collectively by their member local authorities.

In late July, councils were given an eight-week period to work through the proposals and think about how it affects their council and community.

"During this period we're not making decisions," Fermor said.

"We have been working through a significant amount of material to try to understand the reform package so we can go back to the Government with the right questions."

The council's chief financial officer Mike Fermor said a pause had provided an opportunity to gather local feedback for the Government's Three Waters proposal. Photo / Bevan Conley

Councils are not allowed to make any formal decisions regarding the reform programme and there is no requirement for councils to conduct public consultation on whether to opt-out or not at this stage.

Whanganui District Council is providing Three Waters Reform information on its website with an online portal to enable the community to raise issues they believe the council should pass on to the Government.

Fermor said the Department of Internal Affairs (DIA) has indicated that local bodies would face "significant regulatory obligations and costs" if they were to opt out of the reforms.

"The issue for councils is that they are being asked to consider the impacts of the reforms on their communities in the absence of detailed information on the new regulatory framework."

The DIA has assured Local Government New Zealand (LGNZ) that the assets would not be sold and the reform process will include safeguards against the possibility of private ownership.

LGNZ passed a motion at its July AGM that it did not support the reforms being made mandatory and acknowledged that individual councils remain able to express their own views on the reforms and make their own decisions.

Fermor and council projects manager Claire Williamson have prepared an extensive report covering the likely implications of the council opting in or out of the reforms, financial projections for both scenarios, background on why the Government is proposing the reforms, and the next steps which include uncertainties.

The report can be viewed on the council website and Fermor said the Local Government Act requires that councils formally consult the community on all major decisions.

"Our community rightfully expects to be kept informed and to eventually have a say in any decision to change how our three waters services are owned, governed, and delivered," he said.

The Government has stated that it will not make any further decisions until September 30 and has indicated that a formal public consultation process will follow.

The three waters reform programme takes a long-term view with a 30-year timeframe and a DIA spokesman said it is unlikely that a future government would wish to dismantle the structure if it goes ahead.

"The scale of the reforms, their health benefits, their role in supporting growth, housing and regional economic development, as well as the increased voice of iwi/Māori and the wider community in these services, would make it unlikely that a future government would want to reverse them," he said.

"These are large, complex intergenerational reforms addressing challenges to New Zealand's vital water infrastructure and services that successive governments have been aware of for more than two decades."

Whanganui Mayor Hamish McDouall and all councillors are in agreement that the Three Waters reform consultation process has been moving too fast.

Councils have until the end of the year to make a decision on whether they wish to opt-out of the reforms and McDouall said it was too soon.

"It would be better to wait until Taumata Arowai [the newly-formed crown entity scheduled to take over water safety monitoring from the Ministry of Health] has been in operation for a year so we have a clearer picture of the state of our three waters," he said.

An independent local government review announced by Minister Nanaia Mahuta in April is scheduled for completion in April 2023 and McDouall said it was worth considering that might be an appropriate time for decisions on the Three Waters proposal.