Three Waters reforms: Coromandel mayor raises concerns over equity of shareholding structure

Thames-Coromandel District Council Mayor Sandra Goudie raises her concerns about the equity in Three Waters Reform entities. Photo / Alison Smith

Thames-Coromandel mayor Sandra Goudie is questioning the equity visitor destination councils will have in the Three Waters reform entities planned by Government.

She says districts such as Thames-Coromandel will be missing out on funding and be severely under-represented in the Government's shareholding scheme for the new water service entities, as their share allocation was based on only its full-time resident population, while the areas' populations can increase 400 per cent over summer.

Meanwhile, Waipā mayor Jim Mylchreest says his position on the proposed reforms had not changed and the four-entity model should not be the only option available.

Goudie says the Government should have taken into account that the population of tourist destination councils like hers can double on a long weekend.

"It goes up 400 per cent over the summer. We've got to supply clean water and wastewater services for all of them. We have nine wastewater treatment plants and nine drinking water plants, [while] Hamilton has one of each.

"There's an inequity in the financial support and shareholding aspects of the reforms. The Government allocation model puts our district permanently and historically at the bottom of the rung with the allocation of funding," she says.

Thames-Coromandel District has a permanent resident population of approximately 33,000. According to the Government announcement, each council will get one share per 50,000 people in its district - rounded up.

This means Thames-Coromandel District will receive one share, the same amount as Kawerau in the Bay of Plenty, which has a population of 7,670.

"With allocation based on the resident population on census night, [without] our 52 per cent absentee ratepayers who live elsewhere means we only get half of what we should be getting," Goudie says.

According to Government plans, her district will be part of entity B together with 22 other councils, including Kawerau, Hamilton, Tauranga, Matamata-Piako and New Plymouth.

As part of the Three Waters reforms, the Government offers financial support. For this 'better-off funding' a district's population accounts for 75 per cent of the Government's weighting in considering the applications. Socio-economic measures account for 20 per cent and the landmass of a council the remaining five per cent.

With this, Thames-Coromandel would receive $16.2 million in funding, while Kawerau would receive $17.27 million.

"We should be getting $32 million," Goudie says.

A Department of Internal Affairs (DIA) spokesperson says the funding allocation framework was based on a nationally consistent formula agreed upon by the Government and Local Government New Zealand.

A DIA spokesperson says compensating councils for their Three Waters assets would mean New Zealanders would be paying twice for the same assets. Photo / 123rf

"It recognises the relative needs of local communities, the unique challenges facing local authorities in meeting those needs and the relative differences across the country in the ability to pay for those needs."

The spokesperson says they want to make clear that under the Three Waters reforms the Government is not confiscating, buying, or selling assets.

"The communities that have paid for existing assets through rates will continue to receive the primary benefit of their ownership - the provision of safe, affordable and sustainable drinking water, wastewater and stormwater services.

"If central government was to compensate councils for the full value of the assets transferred to the new water entities, it would mean that New Zealanders would have effectively paid twice for the same assets, firstly through their rates and then again through taxes."

Meanwhile, Mylchreest says there was a simpler solution to "decades of insufficient funding for critical infrastructure".

"It is acknowledged that in some circumstances reform is required but this does not mean that the four-entity model is the only option available.

Waipā Mayor Jim Mylchreest says the four entities were not the only model available. Photo / Supplied

"The Government could simply provide financial support to communities that genuinely need that support due to their small rating base or specific challenges... Nothing the Government has stated with regard to the transfer of these assets to a new entity gives us any confidence that we will retain any meaningful property ownership rights."

The DIA spokesperson says: "National funding solutions, such as that proposed by C4LD, may provide short-term benefits for investment, but would require additional revenue sources that would be costly to raise and collect.

"Without accompanying improvements in the efficiency and effectiveness with how services are delivered, water customers and/or taxpayers would be likely to face higher costs under this approach.

"In addition, we know from past experience that central government subsidies for water services infrastructure often aren't enduring, and are often prone to the political whims of the Government of the day."

Last month, Thames-Coromandel District Council decided to sign up as a member of the local government action group Communities for Local Democracy (C4LD), joining 30 New Zealand councils including the four Waikato councils of Matamata-Piako, Waipa, South Waikato and Ruapehu.