Three Waters: Taupo District Council workshop explores water reform issues

The Three Waters reform proposals are being debated by councils around the country. Photo / NZME

Change is coming and the status quo is not an option.

That was the message being given loud and clear at a Taupō District Council workshop on Three Waters reform on September 7.

Councillors and council staff at the online workshop were joined by Jason Krupp of Local Government New Zealand and Paul Blair, who works with infrastructure consultancy Tuhura & Partners.

The reforms propose grouping councils together to form four large entities charged with managing drinking water, wastewater and stormwater. Taupō district would be under Entity B, along with 21 other councils.

There will be new water standards to meet and a new regulator, Taumata Arowai, to enforce them. Water infrastructure would remain publicly owned and the entities would be governed by a regional representative group, equally split between local authority representatives and iwi representatives.

Council's general manager of operations and delivery Kevin Strongman began with a recap on where the council had got to on the reform. Councils have been given eight weeks to assess the proposal and provide feedback. From there, the government will come up with a final model.

Mr Strongman said the council had used a 'balanced scorecard' approach, assessing the proposal under 55 different criteria and while there were pros and cons on every aspect, over the full term of the reform, "we are probably on balance better off [with reform]".

In future the council would face major challenges meeting increasing resource consent requirements, resolving non-compliant private water supplies and dealing with septic tanks from smaller communities, particularly beside the lake.

While council's debt to income ratio was under 100 per cent for 2020, the ratio for water was closer to 300 per cent and that will increase to about 450 per cent by 2031.

Mr Blair said it was widely acknowledged that water reform was coming.

"Things really do need to change. What we are looking at is how, when, why and who.

"What you are being asked is to look at water as a utility service being delivered to you in the same way you get a service from other names like Chorus, Vector, Transpower. These are really big, utility-scale professionally-managed entities."

There were six big questions which revolved around decision making, use of land, the iwi co-governance model, investment prioritisation, the water entity set up and protecting or enhancing local workforces and businesses.

Feedback from councillors was that they were hearing opposition and so little information had been available that people did not understand the rationale for reform.

Whether the projected level of cost savings - 45 per cent - was achievable was one frequently-heard question.

Mr Blair said there was "quite a bit of scepticism" around the numbers but case studies showed savings of that order were "absolutely achievable".

Whether costs would rise to $7310 per Taupō district household per annum in 2051 as in the model, or $5000 or $9000, there was no doubt that without reform, costs would substantially rise.

Prime Minister Jacinda Ardern and Local Government Minister Nanaia Mahuta in Havelock North for the Three Waters announcement in July 2020. Photo / Hawke's Bay Today

Local authorities would still own their assets through the regional representation group which will comprise 50 per cent local authorities and 50 per cent mana whenua, or four people from each.

Mr Blair said they would need to be highly-skilled and understand tikanga Māori and Māori world views, be able to handle the competing priorities across different communities, wellbeings, the demands of water regulator Taumata Arowai and a consumer body.

"This is not going to be a regulation-lite type environment, you are going to see some quite heavyweight candidates going on that new board."

Mr Blair said appointees will be decided based on competency so it could not be dominated by a single large council.

It is unclear who will pay for the water, whether ratepayers or consumers, and Mr Blair said councils had highlighted lack of clarity on that as a concern.

Mr Krupp said the water entity would not be able to cut people's water off because it was a human right but it could do things like move non-payers to low flows. There were also other methods such as transfers, similar to the winter energy payment, to offset cost.

Councillor Kevin Taylor said what most people did not realise was regardless of the reform, new water standards are coming and a new regulator to enforce them.

He said another thing people did not understand was that while council's water assets would go to the new entity, so would the associated debt, which provided opportunities for councils to free up money to do "a whole lot of other stuff".

Taupō District Council in session. Photo / File

Mr Krupp said what form public consultation took after the final model is developed depended on the path of reform. But he cautioned it was not about a choice of opting in or opting out to the status quo, "because there is no status quo".

"We've now got Taumata Arowai enforcing drinking water standards with a very large stick in the form of fines ... that's another really difficult regulatory environment that's going to be imposed on councils."

Mr Blair said if councils were able to opt out they needed a good understanding of the risks that would fall on them: rising environmental standards, rising iwi standards, climate change and more as well as to consider whether they would have the financial capacity to respond, or whether they were better off to have a bigger entity take that risk.

Mr Strongman said he and his staff had been through all the figures and agreed that water costs were going to rise to comply with the new standards being demanded.

"Some of the stuff we went through with the Long Term Plan in particular made all of our eyes water, the amount of work we have to actually do to actually be compliant. We have an unenviable position of having 19 water supplies and 12 wastewater supplies so everything we do is just multiplied and multiplied, compared to other councils in this space.

"Yes we are doing a really good job at the moment and exceeding expectations but that goalpost is changing and we'll no longer be there by a long way."

Work on the reform proposal is continuing until late September at which time the council has to provide feedback to the government on the impact on itself and the community.

■The workshop can be viewed on the Taupō District Council's YouTube channel.