"The overarching premise behind it [the funding] is to allow councils to transition to what we look like post the reforms - whatever that is," said Fermor.
"The first tranche has to be applied for by the end of September and the second tranche in July 2024."
Fermor explained that 50 per cent of the payment would be funded by the Government and the other 50 per cent would become a debt carried by the new water entity from 2024.
He assured councillors that acceptance of the funding would not constitute an acceptance of the Government's reforms and said council officers were of the opinion that the community would be better off if the council accepted the payment.
If other councils that are part of the same entity accepted the payment and Whanganui did not, then the council would effectively be subsidising the other councils' repayments Fermor said.
"Officers don't see any downside risk in applying for funding from this tranche," he said.
Council officers prepared a list of possible projects that meet the criteria for the better-off fund.
They included a preliminary social housing study, the Sarjeant Gallery redevelopment, North Mole rejuvenation, the Davis Library extension, accessible playgrounds, the Coastal Plan implementation, and electric vehicles for kerbside recycling and food waste.
"They are projects we have identified are in our long-term plan," Fermor said.
"We have consulted the community on these projects and they meet the criteria for the funding."
Officers requested that council chief executive David Langford consider the list of projects to determine their eligibility.
Fermor said iwi consultation was a requirement of the process and informal discussions had taken place.
He said a formal meeting had been scheduled for August 12.
Councillor Hadleigh Reid asked why the Three Waters reforms were part of the funding process.
"I guess it's a no-brainer to ask for six mil' but why is the Three Waters even connected to this?"
Mayor Hamish McDouall said his understanding was that the aim was to allow councils to build new assets.
"It's to help us build an asset base which we can borrow on," he said.
Fermor confirmed that was correct and said it was to help put the council in a better position post-reforms.
"Why not just let us pay off the debt we have on our water assets?" Reid asked.
McDouall said it was about having retained assets that could be borrowed against repeatedly.
Langford said the council's submission to the Water Entities Bill which will be submitted to a Parliamentary select committee by himself and McDouall included questions about the better-off funding.
"We did submit that council should use this better-off funding as we see fit," said Langford.
The submission also contains the request that the Government should fully fund the projects rather than burdening the new entities with 50 per cent of the costs.
Councillor Rob Vinsen asked if applications for the second funding tranche would be limited to the ones on the list.
Fermor said new projects identified prior to July 2024 would be eligible for the second tranche.
"That's the start of our next long-term plan," he said.
Councillor Charlie Anderson voted against the resolution to make the application for the first tranche of funding saying that he did not "trust this Government" and would not support it.
He said the council should take a stand and refuse the funding.
Other councillors supported the application while expressing reservations about the Three Waters reforms.
Most said they supported delegating the chief executive to make the application and that the projects listed in the proposal would benefit the community.
Suggestions for including projects such as the velodrome track, the port development and investigating a new hotel in Whanganui were suggested however Fermor said they did not meet the eligibility criteria.
He said they could be developed for the second tranche application.
Rob Vinsen and Kate Joblin asked that social housing be given priority when making the application.
Josh Chandulal-Mackay said it was important to remember that the council had sold off assets such as its forestry portfolio, GasNet dividends and Energy Direct to fund upgrades to water infrastructure amounting to $23m which was equivalent to the amount the council would receive from both better-off funding tranches.
"I want to highlight the fact that this funding is not the full extent of what we should receive," he said.
"We should not lose sight that some of this money is being requested back by the Government."
Councillor James Barron compared the situation to having your TV stolen by someone who drops $50 on their way out.
"I'm going to pick up the $50 and continue chasing them down the road. I support this resolution," he said.
McDouall said he had faith in Langford's discretion and ability to determine the eligibility of the projects.
"By supporting this motion the council is not supporting the Three Waters model," he said.
