Rotorua's mayor says she is not surprised the Government will plough ahead with Three Waters reforms, but others in the district say the move is an "asset grab" and not democratic.
On Wednesday morning Local Government Minister Nanaia Mahuta announced the Government would force through its Three Waters reform, which would see the creation of four water entities, transferring billions of dollars of drinking, waste and stormwater infrastructure transferred from councils.
Mahuta said water assets had been "languishing for the last two decades".
"This is an all-in approach that will require legislation, and it will require every council to be a part of the quantum shift in the way that water services are delivered."
She said the Government did not accept the status quo was "good enough" and the reform would improve health and environmental outcomes, save ratepayers money and improve service delivery.
It was an about-turn on the reform, which had previously been posited as a scheme the councils could choose to join or not, but Mahuta said as the "dire" need for reform became apparent, to continue with the status quo would be "irresponsible".
The announcement also confirmed consultation would be at a national, not local, level.
Legislation is expected go before Parliament before the end of the year.
Mahuta refuted claims the reform was an "asset grab", as it had been described by the National Party and others, saying councils would continue to own the assets "alongside other councils within their entity".
Wednesday's announcement saw one concession from the Government: the creation of a working group to address concerns raised by councils about the governance and accountability structure of the entities – an issue which was raised by Rotorua Lakes Council in its preliminary feedback submitted in September.
On Wednesday, in a statement via the council communications team, Rotorua mayor Steve Chadwick said the working group was a constructive step towards addressing councils' concerns.
"The mandating of the reforms is not a surprise."
She said the infrastructure investment challenges councils faced were "huge".
"Ensuring we maintain a local voice to address local needs and issues is key for us."
Chadwick said the council largely agreed with the need for change but had concerns about the governance and accountability of the proposed new entities, as well as how those entities would engage with Māori.
"I was also pleased to hear assurances relating to public ownership of infrastructure assets being maintained. I'm keen to see what that looks like."
She said the council would "continue to participate constructively" in the reform process.
Asked for the council organisation's view of Wednesday's announcement, a spokeswoman referred Local Democracy Reporting to its feedback to the Government a month ago.
National Party local government spokesman Christopher Luxon described the Government's move as an "asset grab" and vowed to repeal it if elected to government.
He said the reform model was "fundamentally broken" and created "needless bureaucracy".
Luxon said there was a need for "enduring, collaborative relationships between councils and the Crown" but the Government's announcement eroded trust and goodwill between the two.
Reporoa Residents and Ratepayers Association committee secretary Karen Barker said the mandate was "astounding", considering the "fierce opposition from many councils".
She believed the Government had used "flawed modelling" as its basis for the reform.
Barker refuted Mahuta's assertion that water assets had been neglected as "grossly unfair and untrue".
"This action today is a total U-turn on the Government's previous promises to make this process voluntary. There is now no right to opt out."
She said the proposed governance structure of the entities would have "no accountability" to councils and ratepayers.
"How is it that councils 'retain ownership' in this scenario?
"This is a massive asset grab and a concerted drive to control resources."
She said ratepayers had so far had "no say" in the reform discussion.
"This is not how democracy should work."
In response, Mahuta said Barker was entitled to disagree but "it doesn't change the fact that without reforms ratepayers are looking at substantial ballooning costs to maintain their water infrastructure for future generations".
She said entities would face economic regulation, which did not happen with council, and would not have to compete with political priorities.
"These entities will be collectively owned by councils, and the pipes and plants will service the same communities they do now. The difference is they will be looked after, maintained and renewed more cost-effectively. Ratepayers will pay a lot less for services in the future under reform than they would without."
Rotorua Residents and Ratepayers chairman and Rotorua district councillor Reynold Macpherson said his group could see "real benefits yet major challenges" with the Minister's decision.
"Her promise of drinking water that meets national safety standards is welcome, as is appropriate investment in infrastructure at an affordable price, and expertly managed wastewater and stormwater systems.
"On the other hand, the current design of the four giant entities won't deliver democratic governance and public accountability."
He asked if mana whenua sought "co-governance and ownership" whether the working group would "offer authentic public participation and local consultation to help create a broader public consensus".
Te Tatau o Te Arawa chairman Te Taru White said he believed there was a genuine desire from the Government to involve iwi in decision-making.
" I think they've very genuine. They're using the right language."
He said iwi in the Entity B region – of which Rotorua was part – had already met and agreed to work cohesively in the reform and had committed to including hapū in discussions.
"It's a great opportunity for iwi and we have to make the most of it."
Evolve spokesman Ben Sandford said there was a "strong case for change" in three waters but the devil was in the detail.
"The question is are the proposed reforms what is needed?"
Sandford, a previous Labour candidate for Rotorua, said there was "little doubt" councils were struggling to maintain existing water infrastructure, let alone accounting for growth and climate change.
"There is a lot of detail that needs to be sorted out, especially around the governance of these entities.
"One of the successes in Rotorua has been our ability to build partnerships between council, iwi and the community to achieve positive outcomes.
"We will need to advocate for these entities to have governance and consultation that is inclusive and works to ensure the best outcomes for our community."
In a statement, Local Government NZ president Stuart Crosby said he agreed that there was a need to address systemic issues with the current system but it was disappointing that the Government had mandated the reforms.
"The sector has said loud and clear that the model needs significant work.
"While the announcement stings for councils who have been good stewards of their infrastructure, ultimately the nationwide affordability challenge in the water space needed to be answered."
Federated Farmers president Andrew Hoggard said rural residents concerned about the future of their water, sewerage and stormwater infrastructure should gear up to have their say.
"We remain opposed to this plan.
"This [working] group will have its work cut out to allay a multitude of concerns."
He said among the concerns were the complexity of rural water scheme ownership, how rural voices would not be "crowded out" in investment priorities and the robustness of the Government's estimates of savings from the reform, as well as the wider uncertainty in local government reform.
Te Arawa Lakes Trust chief executive Karen Vercoe was approached for comment.