Water reforms repeal could leave some councils out in the cold – mayor

5:38 pm on 1 March 2024
Rangitīkei Mayor Andy Watson says councils with water-related debt problems will have a tough time finding partners for Three Waters collaboration.

Rangitīkei Mayor Andy Watson says councils with water-related debt problems will have a tough time finding partners for Three Waters collaboration. Photo: Aka Creative

The repeal of water service reforms has left some councils with significant debt problems, a district mayor says.

Rangitīkei mayor Andy Watson describes the water provision as a ticking time bomb for local government, and says some councils will have a harder time finding partners for water services collaboration.

"Some councils will be just about insolvent and not able to pay their bills because they assumed [water services] debt wouldn't be a worry to them," Watson says.

"The country's water infrastructure was put in 100 years ago and stood up for a long time before it started failing en masse.

"The amount of work we need to do in Three Waters, especially wastewater, will challenge debt ceilings in the future."

The previous government's Affordable Water Reform (earlier called Three Waters) intended to create new water entities responsible for water assets, but Rangitīkei District Council made provision in its 10-year budget for water services "on the assumption we could still be responsible".

That precaution has given the council some breathing space after the new coalition government in mid-February scrapped the Water Services Entities Act under urgency as part of its 100-day plan.

The government is developing new water reform policy - Local Water Done Well - and plans later this year to introduce a bill allowing neighbouring councils to band together to form council-controlled organisations (CCOs).

The CCOs could achieve balance sheet separation and borrow more than individual councils are able to on their own.

Watson said banding together would be "hugely more complicated" for councils that failed to invest in or budget for infrastructure, resulting in compliance costs that their neighbours may not want to shoulder.

"Some councils are very well provisioned for drinking water, wastewater and stormwater. Some are very solvent financially. They have invested and their systems are very simple and don't require huge cost.

"Some councils are taking the view they don't need relationships, and that they are comfortable to stand alone.

"The difficulty for the government is that councils that cannot afford [to invest in water services] will need to be picked up by someone.

"Why as a business would anyone want to take on provision of services for a council that can't fund it themselves?"

The Rangitīkei mayor is adamant that iwi must be involved in water services discussions.

"There was a lot of emotive feeling around co-governance arrangements but when you are talking about the allocation of water or wastewater disposal processes, no matter what you do you still have to go through an RMA (Resource Management Act) process.

"Iwi have to be part of these conversations."

Watson said talks with neighbouring councils have begun while his council awaits more detail on Affordable Water replacement legislation.

"There are ongoing discussions with chief executives and mayoral groups on how to potentially partner up.

"We're not on the same page but we're getting closer to being on similar pages. We are working together far more closely than when I first came into local government 20 years ago."

Whanganui mayor Andrew Tripe said his council had also factored water services into its draft LTP and was in a good position to plan for its future.

"There are always line items for Three Waters replacement and maintenance. We're carrying on with maintaining and replacing our assets as required."

Tripe said while some councils were facing massive investment in infrastructure, particularly stormwater and wastewater, Whanganui had invested responsibly and well in its water treatment plant and stormwater and drinking water.

"Both with investment and the quality of those assets, we are in very good order compared to most councils around the country, and we have relatively low debt levels.

"We're in a good position compared to other centres such as Wellington."

LDR is local body journalism co-funded by RNZ and NZ On Air.

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