South faces prospect of great change

The Government’s proposed Three Waters (drinking water, sewerage and stormwater) reforms will mean  some massive changes across the South. The Otago Daily Times sought comment from councils around the region yesterday.

• Mayors cautious over reforms

Central Otago District Council

Central Otago Mayor Tim Cadogan said the council "knew it was coming", but there was a "huge amount of documentation" beyond what had been presented in the dashboard information and errors had already been identified, such as counting 121 full-time equivalent employees at the council engaged in Three Waters-related work.

"Each person got counted three times."

He also questioned the projected 2051 figures for cost per household and said they "seem too high".

According to the figures presented by the Ministry of Internal Affairs, the average cost per household per annum in 2021 was $1071; in 30 years that was projected to be $1640 with reform or $7790 without reform.

Mr Cadogan said it was now a case of getting input from staff and advisers.

Cr Nigel McKinlay, who holds the council’s Three Waters and waste portfolio, described the Government’s reforms as "intrinsically difficult" and a "moving target".

Clutha District Council

Clutha Mayor Bryan Cadogan said if one thing remained unchanged in the coming months, it would be that councils would be embracing their communities to make, together, "the biggest decision in a generation" — such was the magnitude of the changes suggested.

"Councils have only two options offered by the minister: to opt out of the new entities that were announced yesterday, and incur all costs to meet future legislative requirements regarding [Three Waters], or opt in to the new entity and receive financial assistance from central government," he said.

Either option was more expensive than existing structures, but the incentive offered to councils which opted in with financial support skewered the playing field and complicated what was already a complex task, Mr Cadogan said.

"Councils are ... up for this challenge, and make the steadfast assurance that we will conduct our deliberations with the singular focus of ascertaining the best outcome for Clutha long-term both from an economic and social perspective."

People should not underestimate the complexity and breadth of issues at play in the reforms, from the future of local democracy, costs, ownership of assets, to rural water schemes and input into governance, he said.

Dunedin City Council

Dunedin Mayor Aaron Hawkins said separating the provision of water services from the council’s spatial planning role was one of the things he was most nervous about.

"If you’re in a growing area and you have to provide for greater residential development capacity it makes sense to do that in the places that it makes the most sense to do that, not in the places where its most efficient or convenient ... for a water service provider to put pipes in the ground," he said.

It was not clear what the alternative would be for councils who opted out of the Three Waters reforms.

Dunedin City Council infrastructure committee chairman Jim O’Malley questioned how the Government reached those dollar figures.

"I would argue that it’s not clear how the calculations have been put together by the Department of Internal Affairs ... so there’s a huge amount of unknown to opting in."

He also said losing control of Three Waters infrastructure would make it difficult for councils to plan for future growth.

Water services make up about a quarter of the council’s business.

Gore District Council

Gore Mayor Tracy Hicks said it was too soon to comment on the water reforms.

"We need to take time as a council to just consider what the options are," Mr Hicks said.

"I think there are risks and rewards and we just need to measure both those to see where we end up."

Regardless of the reforms, the council was facing huge expenditure in the next 20 to 30 years to upgrade its Three Waters network.

"We’re probably looking in a ball park figure of between $300million and $330million [for] drinking water, wastewater and stormwater, which would place a huge impost on a community this size."

The reforms could bring a change to the role of local government.

"Water supply and wastewater removal has been an integral part of the purpose of local government over the last 100-plus years, so quite a big shift."

The council employed about 17 staff members in its Three Waters department.

It was unlikely those people would lose their jobs as staff would be needed to look after the service no matter where the head office was, he said.

Invercargill City Council

Invercargill deputy mayor Nobby Clark is not convinced by the new proposal.

The approach to drinking water, and improving standards, was taking a sledgehammer approach, considering most drinking water was not actually drunk.

He said there were other issues regarding wastewater and its disposal, which was likely to increase costs.

"We are one of the best performing councils with water so do we want to spend billions of dollars when it is not going to come here?" Cr Clark said.

"We know they are going to invest in Otago — in Queenstown, Wanaka, South Dunedin — and we will not see any of it."

He said if Christchurch pulled out, there would be no point in Invercargill staying in as the economics of scale argument did not stack up.

The water section of the council was about 30% of its business.

Cr Clark said the water sector lacked the expertise and staff to bring in the changes.

Queenstown Lakes District Council

Queenstown Lakes Mayor Jim Boult said he was "generally comfortable" with the four-entity model being proposed, but the devil would be in the detail.

"The governance structure will have to be carefully put together, and there will need to be very capable directors to govern that organisation."

The next step for the council would be to check the modelling released by the Government, showing how much it expected ratepayers to save as a result of water reforms, Mr Boult said.

The council would have to ensure it was adequately compensated for the removal of its assets, and receive a commensurate shareholding in the new entity.

The centralisation of control of most of the South Island’s Three Waters infrastructure into a single entity was potentially to the advantage of a fast-growing district like Queenstown Lakes, "but that depends on all the above", he said.

Southland District Council

Southland Mayor Gary Tong said there was plenty of information to go through with the new proposal.

It was a big proposal and plenty of time would be needed to go through it.

Until the council did that, it was hard to make any real comment about the proposal, he said.

Southland had plenty of water schemes throughout the district and it was about 30% of the council’s business.

With any proposal there was the threat of staff losing their jobs, but Mr Tong said there would still be a need for "soldiers on the ground".

Staff would still be needed to do the work on the water infrastructure.

Waimate District Council

Waimate Mayor Craig Rowley said he was yet to see a centralisation programme that had worked effectively, and was most concerned by "all the unknowns".

"Once it’s done, it’s very, very difficult to undo. And what sort of destruction do you leave in your path, going through a reform that’s poorly informed and inaccurate?"

About 30% of Waimate District Council business related to water, and the Government’s plans were very "unnerving" for staff, who did not know if they would still have a job in six to 12 months.

"If you take 30% of the workload out of council around the Three Waters, what do they do?"

He questioned the accuracy of projected Government figures, estimating water costs to a Waimate household under the proposal at $1640 per annum, with proposed eventual costs, if the Government does not intervene, at "$4,900 or thereabouts".

"The issue for us is they’ve lumped urban and rural together, and also to come up with those costs, we believe that they’re wildly inaccurate.

"We don’t believe it’s painting a true picture of the costs moving forward."

The ownership model was also an area of concern, Mr Rowley describing it as a bit of a "Clayton’s ownership".

"They’re saying that the water entities would be a 50/50 ownership between council and Maori — but how do you own something that you have no control over?"

Waitaki District Council

Waitaki Mayor Gary Kircher said there were "still a lot more questions than answers" surrounding the proposed changes, and his main concern was "loss of the local voice".

"We have communities that are growing, or want to grow, want to expand ... a new entity needs to respond to that, just as a council would respond to that now."

He found it difficult to reconcile the "pretty reasonable place" the Waitaki district was in with its water with the projected increases in household costs for the next 30 years, but conceded costs would need to go up.

"I think the challenge is where assets have been well looked after, they’re in good condition, they’ve been upgraded, how that is treated against those that haven’t."

Mr Kircher also found the prospect of staying "basically two arms’-lengths" away from any decision-making relating to the water schemes, while retaining ownership, problematic.

"So we’ll own the asset, theoretically, but with no say, input, or influence into what happens with it."

The Waitaki District Council had 16 staff directly employed in its water team, and there were concerns about their jobs.

"I think the outlook for them is probably very good, but if it wasn’t, chances are we might lose them sooner rather than later."