Whanganui District Council will have to use debt funding to set up water entity

Council chief executive David Langford says Whanganui's water treatment plants are already compliant with standards. Photo / Bevan Conley

Whanganui District Council will have to use debt funding to set up any new three waters entity it is part of.

It would cost between $24 and $42 per connection every year for five years for a water delivery service covering the Horizons region, assuming 100,000 connections. These figures would be subject to further refinement and budget approval as part of future work.

Work on a regional model is ongoing between the Whanganui, Ruapehu, Rangitīkei, Manawatū, Horowhenua and Tararua district councils and Palmerston North City Council, with the option of going it alone also being considered, the council’s three waters transition manager Kathryn Stewart said.

Councils have 12 months to develop, adopt and submit a Water Services Delivery Plan to the government as part of its Local Water Done Well legislation which replaced the previous Government’s Three Waters legislation.

Stewart told the council’s strategy and policy committee the Whanganui council had been prudent with transition funding provided by the previous government and her work would be covered for the next 12 months.

Whanganui mayor Andrew Tripe told the Chronicle that unfunded mandates from central government were like “chucking a hospital pass” and came with increased costs and working hours.

“A massive amount of time and effort goes into setting up an entity like this,” he said.

“I have been involved in hours upon hours on just Three Waters alone, as has the chief executive.”

Tripe said he wanted regional deals – long-term agreements between local government and central government – fast-tracked to make sure there was a more constructive relationship between the two.

Whanganui MP, National’s Carl Bates, said the government had a local government funding agency that would lend to councils at a low cost over a long period to support local Water Done Well implementation.

“This will enable councils to better manage debt and make essential investments in infrastructure without drastic rates hikes,” he said.

“There are requirements to access this lending via CCOs [council-controlled organisations] that must only be involved in the water activities.

“Our model provides councils with the flexibility and tools to meet their unique needs – we know that one size does not fit all.”

The Government has requested unallocated ‘Better Off’ funding – also provided by the previous Government – be transferred to water service delivery.

Whanganui mayor Andrew Tripe. Photo / Bevan Conley

Whanganui received about $6 million from that fund and council chief executive David Langford said there was $400,000 that could go towards it.

However, that would not be enough to cover the cost of setting up a new entity, he said.

“It is a frustration that the reform is being driven by the Government but the costs are falling on the ratepayer,” Langford said.

“Our water infrastructure has been well looked after, our treatment plants are compliant with standards and we’ve got upgrades to make sure they keep pace with the increase in standards that’s coming.”

Langford said the council had debt capacity so it could fund service delivery comfortably as it was.

“But we’re being forced by the Government to make these changes and really, the Local Water Done Well policy is not that different from the previous Labour Government’s reforms, which nobody wanted either.

“If you’re going to instigate change then you really ought to be prepared to fund it.”

The council has five options – the current delivery model, a single council-owned Council Controlled Organisation (CCO), a CCO owned by several councils, a mixed council/consumer trust or a consumer trust.

Langford said he could not foresee any obvious set-up costs for going it alone - “we could continue doing what we’re doing”.

“Obviously, we would still have to comply with all the new standards and economic regulator requirements and there may be additional costs to that – but that is not a set-up cost.

“[Going it alone] is a credible option that will council will give serious consideration to.”

However, set-up costs should “not be taken in isolation” because a regional entity could provide savings to ratepayers in the long term, he said.

Ruapehu mayor Weston Kirton said the $4.12m in Better Off funding his council received was “well gone”.

“We spend it as soon as we get it in case they try and take it off us,” he said.

“That first tranche of funding has been allocated to different communities. We’re sharing the love there.”

He said his council had not budgeted much towards water reforms.

“We didn’t even know what it was going to look like at the time of setting our long-term plan.

“Whenever something comes out of the woodwork or out of leftfield, we have to stop some other project or defer it and that’s quite serious.

“It’s usually infrastructure and that’s something we’ll be forced to do if we’re looking at serious funding to make that transition (to a regional three waters entity).”

Speaking to the committee, Tripe said the council would retain ownership of its water assets regardless of the delivery model, an issue that caused “angst in the community” a couple of years ago.

“Co-governance was another issue causing angst, and this is not a co-governance model,” he said.

“Overall, I think we are in good shape. The issues causing political unrest a couple of years ago have been mitigated.”

The Whanganui council is running ‘Community Korero’ sessions on Local Water Done Well at the following locations:

• Saturday, October 5; 1pm-3pm outside Castlecliff Library at 10 Rangiora Street.
• Tuesday, October 8; 10am-12pm at the Davis Library at Pukenamu Queen’s Park.
• Tuesday, October 22; 10am-12pm at the Hakeke Community Centre and Library at 69 Hakeke Street.

* This story has been amended since first published to correct information provided by council staff at the meeting about the annual cost per connection and the number of connections across the Horizons region.

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 the Whanganui District Council.