Responsibility for drinking water is likely to go under big changes. Photo / Getty Images
The Government says its plan to take over water infrastructure from councils could save Bay people thousands in rates.
Yesterday the Government announced more detail on its sweeping national reforms in part prompted by underinvestment in water infrastructure by some councils.
It proposes to establish four publicly-owned entities to take responsibility for drinking water, wastewater, and stormwater infrastructure throughout New Zealand.
The Three Waters Reform Programme is expected to save ratepayers thousands of dollars and help deliver $120b to $185b of investment.
Bay of Plenty councils are included in Entity B - consisting of 22 districts throughout Waikato, Taranaki and the Bay.
Data from the Department of Internal Affairs shows the average Tauranga household's yearly contribution towards such costs, on average, is $1350. This is expected to climb to $3060. However, the Three Waters intervention would mean the average household would pay just $1220 instead.
The average Western Bay of Plenty household pays $2150 a year. Without the reform, this was expected to nearly double to $4050. Under the reform, Western Bay ratepayers would pay $1220.
For Rotorua residents, the average household pays $1010 already but this would soar to $3400 with no reform. With the changes, it climbs to just $1220.
Local Government Minister Nanaia Mahuta said the case for change was compelling as the average household bill could be as high as $9000 by 2051.
The up-to $185b of investment that was desperately needed was a cost most local councils simply could not shoulder on their own, she said.
Three Waters proposes to establish four publicly-owned entities to take responsibility from New Zealand's 67 councils for drinking water, wastewater, and stormwater infrastructure. The entities would also take on each council's debt.
The entities are proposed to be set up by mid-2022. However, they are not expected to be operational until mid-2024.
Councils concerned at the reform have until November to opt out.
Mahuta said the reform was expected to grow the national GDP by $14b to $23b over the next 30 years and generate 5850 to 9260 full-time equivalent jobs.
"Without this change, communities are going to either face very large bills for water services; or infrastructure will continue to degrade with ongoing health and environmental consequences. Both of these outcomes are unacceptable."
Mahuta said the existing system that provided most of the country's three waters services was "ineffective, inefficient, and not fit for purpose".
"Underinvestment, including deferred maintenance and renewals expenditure, has left a legacy of impending costs and poor services for future generations," she said.
Mahuta said the Government would continue to work with the sector, iwi, and industry and there would be more announcements to come, including a three waters reform support package for councils and their communities.
The reform comes after the establishment of Taumata Arowai, a new independent water services regulator that was created following the 2016 Havelock North water contamination incident.
Local Government New Zealand president Stuart Crosby said has been involved with Three Waters discussions "at a high end" for the past 12 months.
Crosby said the country's 67 councils were effectively in three camps; complete support for Three Waters; those vehemently opposed, and those who liked the concept but had reservations.
Concerns already highlighted include what influence smaller councils would have on the water entities; the potential for privatisation; and the likely loss of revenue from council's losing this arm of the business.
Crosby said mechanics were already in place to ensure smaller councils were heard and the Government was "going to some lengths" to prevent the threat of privatisation.
These were expected to be addressed in design aspects of the reform, expected to be released during the next several weeks.
Crosby said the organisation was trying to shop for the best outcome because "we know our communities best".
"We support the independent water regulator. We support the amalgamation of water supplies, provided it's voluntary. We believe there's a case for change but in saying that, we respect each council's position."
When asked whether there were some councils in desperate need of such a reform, Crosby said many "growth councils" were looking at it favourably.
Department of Internal Affairs data shows Tauranga City Council's current percentage of investment to keep up with depreciation from 2021-2030 is 35 per cent, compared to Western Bay of Plenty's rate of 58 per cent.
A lower figure means a council is spending less on repairing and refurbishing its assets than the rate at which those assets are depreciating.
Tauranga City Council director of city waters Stephen Burton said 16 Waikato and Bay of Plenty councils were already working together to assess the reform's likely impact.
"We are keen to explore collaboration opportunities with our neighbours in Taranaki and Manawatu-Whanganui and look forward to constructive discussions in due course."
Asked whether the council had done a good job of investing in water infrastructure and whether the council let its residents down in this area, Burton said the council had been sensible.
"We are in a fortunate position in Tauranga, where our council has invested prudently in water infrastructure and will continue to do so".
He said most of the city's water infrastructure was in good condition, offering high-quality water and Aa graded drinking water.
"As more people move to Tauranga, our water supply capacity has been put under pressure, so we are currently building a new water treatment plant (Waiāri) to help meet future supply needs."
Western Bay of Plenty mayor Garry Webber said even though the reform involved "a hell of a lot of money", it was the only option, and "from my experience, there are no negatives in this at all".
"Local government just has to accept that is what it is."
Webber agreed the reform reflected a general lack of underinvestment "by many councils".
"There are some that have done reasonably well and that's our council. We are not perfect but our assets are pretty modern and we are maintaining them."
When asked how many council jobs would be affected, a Western Bay spokeswoman said the council was waiting to see what the Minister's next steps were.
She said the council had done a good job in looking after its water infrastructure and provided a good service to its residents.
1 - leading; 2 - exceeding expectations; 3 - performing in line with expectations; 4 - performing below expectations
Tauranga City Council - 2
Rotorua Lakes Council - 3
Western Bay of Plenty District Council - 2
Whakatāne District Council - 2
Ōpōtiki District Council - does not register on scale
Kawerau District Council - does not register on scale
Source - Department of Internal Affairs
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