Whangārei Mayor Vince Cocurullo in the Whau Valley water treatment plant. Photo / Michael Cunningham
The future of Northland’s almost $1.8 billion of Three Waters assets is under the spotlight as the Government moves to repeal existing legislation.
Northland’s council wastewater, stormwater and drinking water provision for more than 150,000 people had been in the process of shifting off the books of Whangārei District Council (WDC), Far North District Council (WDC), Kaipara District Council (KDC) and Auckland Council.
Under the previous Government’s plan, it was to move into a giant inter-regional water services organisation called Entity A.
This entity was to be New Zealand’s first and was to be running by the middle of next year, in what was originally to be four giant inter-regional mega Three Waters entities nationally.
But the new Government is to disestablish Entity A as part of wiping its predecessor’s Three Waters reform, later renamed Affordable Water reforms, and pass the first new law to replace it by the middle of the year. A second law to bring in its long-term replacement by mid-2025 will follow.
The mid-year law change will introduce a bill including streamlined rules for councils to set up council-controlled organisations (CCO) if they wish to.
This could see Northland’s three district councils banded together to create a CCO where Three Waters delivery, financial assets and debts are shifted off councils’ books to the CCO.
That would create a larger-scale Three Waters regional group that could then borrow more than councils could individually.
Councils face a deadline to provide their new regional water proposals to the Government, which will intervene if that does not happen.
The second new law will include powers to be used if councils are failing to meet requirements to deliver financially sustainable and safe water services.
The WDC is Northland’s strongest-placed council when it comes to its Three Waters infrastructure provision and debt, with more than $633 million-plus in sector assets.
Its ratepayers would potentially need to subsidise Three Waters functions for the FNDC and KDC under a single regional CCO, depending on whether the Government contributes financially and how any borrowing for necessary plant upgrades happens.
Local Government Minister Simeon Brown has indicated the Government will not underwrite councils’ new CCOs.
Whangārei Mayor Vince Cocurullo said he supported the Three Waters repeals. However, the council is positioning itself on its part in how any new regional structure for Northland Three Waters provisions shapes up.
“Whangārei’s position has always been that councils who have good assets, ring-fenced funding for Three Waters and are doing a good job should be able to continue as they are,” Cocurullo said.
“They should be allowed to retain ownership and control of water services and responsibility for service delivery.
“There are some who are not in the same situation as our council and they might want a different set-up and it should not be a one-size-fits-all, with minimal local input and no choice.”
Councils are in the midst of putting together their next longer-term budgets. Whether Three Waters infrastructure is on or off their books makes a big difference to the council’s financial health – and in turn the size of next year’s rates increases.
Cocurullo said while the council waited to see what the new Three Waters legislation looked like, it was putting water services back into its upcoming Long-Term Plan. A public consultation is scheduled for March/April.
WDC chief executive Simon Weston has been appointed as one of five water specialists nationally on the Government’s new Three Waters reform technical advisory group, made up of finance, infrastructure and local government experts. The group will advise the Department of Internal Affairs as the new legislation is prepared.
Weston will continue as WDC chief executive whilst being an adviser during that time.
Other group members include New Zealand Infrastructure Commission director Raveen Jaduram, Porirua City Council chief executive Wendy Walker, law firm Chapman Tripp partner Mark Reese and international utilities and infrastructure adviser, Castalia managing director Andreas Heuser, who will chair the group.
Castalia carried out research for the more than two dozen councils nationally that fought the previous Government’s Three Waters proposals as part of the breakaway Communities for Local Democracy. This cast doubt on the then Government’s calculations around the cost to ratepayers of failing to carry out its reforms.
■ LDR is local body journalism co-funded by RNZ and NZ On Air.