Whanganui District Council financing $6.7m start-up costs for new water entity

Whanganui District Council will spend $1.8m on setting up the new water entity in this financial year, and $4.9m next year. Photo / 123rf

Whanganui District Council is financing the $6.7 million cost of establishing a new water entity, but the debt will not remain on its books.

Last July, the council agreed to partner with Ruapehu District Council for water delivery, with assets to be transferred to a new council-controlled organisation (CCO).

It is part of the Government’s Local Water Done Well legislation.

At a council meeting on March 24, Whanganui council three waters transition manager Kathryn Stewart said the debt and interest would transfer to the CCO “to be borne by the water-connected users”.

“[Whanganui council financing the costs] is broadly an administrative choice, in order to efficiently and effectively run the establishment project.

“It is helpful if one council is the council who is receiving the invoices, writing the contracts, writing the procurement plans.

“I think it is reasonably well understood that Whanganui’s financial position is stronger than Ruapehu’s.”

The CCO, responsible for drinking water, wastewater and stormwater for about 25,000 connections across the districts, is planned to be operational by July next year.

At the meeting, Whanganui Mayor Andrew Tripe and councillors Josh Chandulal-Mackay, Glenda Brown, Peter Oskam, Ross Fallen, Julie Herewini and Geoff Hipango voted for $1.8m in unbudgeted funding for the entity for the current financial year.

Philippa Baker-Hogan, Rob Vinsen, Mike Hos and Deputy Mayor Michael Law voted against.

Charlotte Melser and Kate Joblin were absent.

A council report said costs for 2025-26 included strategic oversight ($22,800), the establishment team ($846,000) and communications and engagement ($45,000).

The remaining $4.9m, for the transition phase led by the CCO’s executive team, was expected to be spent in the next financial year, it said.

“This budget is provided for in the draft Annual Plan budgets for 2026-27.”

Stewart told councillors the Department of Internal Affairs (DIA) could step in if the budgets were not approved and appoint a Crown facilitator or technical expert at the council’s expense.

The DIA approved Whanganui and Ruapehu’s plan last November.

Council interim chief executive Barbara McKerrow said the decision to form the CCO had already been made by elected members.

Councillors voted 8-5 in favour of the new CCO last July.

“This is an administrative step to ensure the decisions you have made and cannot undo today can be implemented by staff.”

She said the process to form the CCO would be correctly managed and “have no undue impact” on the council.

Mike Tweed is a multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present, his focus is local government, primarily Whanganui District Council.