The levels of spending needed are expected to be expensive and the Government plans to take some functions away from councils, create water entities and move oversight responsibilities to a new regulator.
Gore Mayor Tracy Hicks said it was clear reform was advancing, but councils needed clarity, quickly, about the implications.
"There’s still a lot to be revealed about what the structure might look like," he said.
"But it’s becoming clearer by the hour that reform is here and we need to get involved and understand the implications for our communities."
Clutha Mayor Bryan Cadogan said the reform process was moving incredibly quickly.
The proposed reforms were far-reaching and fast-moving, he said.
However, he was not sure councils were in a position where they could communicate effectively with residents and ratepayers about what was happening.
The meeting in Wanaka yesterday was one in a series of workshops run by the Department of Internal Affairs and a joint central and local government steering committee for the Three Waters reform programme.
About 65 representatives from councils in the South attended.
Steering committee independent chairman Brian Hanna said he detected growing recognition that reform was necessary.
The day had been about presenting information to representatives of local government and receiving questions and feedback.
Communities were facing significant financial challenges in getting infrastructure up to a sound standard, he said.
"The status quo will not be able to deliver."
It was expected that some council assets would be transferred to water entities, creating economies of scale.
Mr Hanna said councils sought reassurance that staff expertise would not be lost amid the changes.
A proposal will be presented to the Cabinet in May and councils would need to decide by the end of the year if they wanted to opt out of the reform process.
Early modelling has shown that up to $50 billion more may be needed in the next 30 years to maintain and replace the asset base.
