Three waters reforms mean big decision for Whanganui region councils

Work on water and pipes has been provided by councils, but it could become the responsibility of larger regional bodies. Photo / Bevan Conley

Whether to opt into the Government's three waters reforms later this year will be the biggest decision of the current councillors' triennium, Whanganui District Council chief executive Kym Fell says.

And mayors around the region are of the same opinion. Rangitīkei's Andy Watson said it would be the biggest decision he will make, and South Taranaki's Phil Nixon didn't expect anything so major when he stood for mayor.

The reforms seek to take responsibility for drinking water, wastewater and stormwater away from local authorities and put it in the hands of larger regional bodies.

Whanganui mayor Hamish McDouall said good things could come of it - but the past 35 years of investment by Whanganui ratepayers and councils in water infrastructure has to be recognised.

Recognition could be through removing Whanganui District Council's debt, which would reduce rates for residents.

Whanganui's investment in water infrastructure must be recognised in Government's three waters reforms, Whanganui mayor Hamish McDouall says. Photo / Bevan Conley

The council charged $19 million this year in rates to pay for water infrastructure and what it provides, chief financial officer Mike Fermor told its infrastructure committee.

The council owes $75m on the infrastructure. The depreciation replacement cost for it is $420m but the actual cost to replace it would be $700m.

Handing responsibility for those assets to another body would strip away about 30 per cent of the council's business, Fermor said.

The Government has an ambitious timeframe for the three waters reforms. Councils will be asked in September-December whether they want to hand responsibility for their water services over to another body - with the nature of those bodies to be decided in April/May.

Watson and Nixon are both waiting for more information about what is involved before their councils make a decision. But Ruapehu mayor Don Cameron is pretty certain his council will opt into handing over its water infrastructure and provision.

Ruapehu took the initial money the Government offered. It was $5.6m, plus $4m from a tourism fund to upgrade Ohakune's drinking water after a boil water notice was issued last winter.

Ruapehu District Council is likely to opt into the full reform package, mayor Don Cameron says. Photo / Bevan Conley

"For small councils it's really hard to opt out because we have got to bring all our wastewater and stormwater up to new standards and all of us are going to be way outside our debt levels."

Whanganui and Waimakariri are the only councils he knows of with new and compliant wastewater treatment plants.

Whanganui District Council entered into the reforms by accepting $6.3m and agreeing to share information on its assets. It can decide whether to opt in or out of the next stages.

McDouall, who is the vice-president of Local Government New Zealand, said some councils are enthusiastic about the reforms but others, like Whanganui, may decide to opt out.

"The working party and Government keep saying this is voluntary, but I can't help feeling a sense of compulsion coming down the line eventually," he said.

"If hardly any [opt out] they will get pushed in - that's my fear."

He said he is proud of the way Whanganui has invested heavily in water infrastructure and is one of the few councils in the Horizons Region with compliant drinking water and wastewater treatment.

He'd be happy for Whanganui to help neighbouring smaller councils with infrastructure costs, but said improving Palmerston North or New Plymouth's wastewater treatment would cost "hundreds of millions".

"I don't know of anyone in Whanganui who would be happy to subsidise Palmerston North's under-investment."

On the plus side, he can see that it will be good for all councils to get specialised reports on their wastewater treatment plants. And a centralised decision making body might have rejected the Whanganui wastewater treatment plant design that failed the city in 2012.

Scotland and Tasmania both have regional bodies that work to control their water infrastructure, he said. And he knows smaller councils like Ruapehu and Rangitīkei have multiple wastewater treatment plants and drinking water schemes and could be grateful for help from a larger body.

Work on water and pipes has been provided by councils, but it could become the responsibility of larger regional bodies. Photo / Bevan Conley

Meanwhile, the Whanganui council is spending its "free" three waters money on improvements. The two biggest yet to come are connecting Fordell to the city water supply and connecting Airport Rd and the Whanganui wastewater treatment plant by adding a new pipe under the Cobham Bridge.

Rangitīkei also took the first tranche money, Watson said.

He believes the Government's timeframes for the reforms are over ambitious and will make it difficult to get meaningful decisions.

The easy option would be to remove those assets from the council's bottom line, but someone has to pay and he wants to know how that would work. He also wonders how iwi will fit into the change.

"Conceivably they may have a differing view to councils. How we go through that process will be interesting."

Cameron could see this change coming. He said Local Government New Zealand warned central government about the need for a body other than the Ministry of Health to take charge of water standards.

"We should have been looking at this 20 years ago. It was inevitable."