The Government's Three Water Reform Programme has started, with the Whanganui District Council letting tenders to upgrade the water supply in some areas of the city.
It has been able to do so due to Government funding for upgrades to drinking water, wastewater and stormwater systems as part of the reform process.
Whanganui mayor Hamish McDouall has previously said the reforms could be the biggest reorganisation of local government since the amalgamations of 1989.
This year the council will begin spending $6.32 million of "free" Government money that is likely to progress it toward losing control of its water assets.
The first step was taken in August last year, when councillors agreed for chief executive Kym Fell to sign a memorandum of understanding with the Government. It commits the council to accept the objectives of government reforms, work with others and be willing to give up its water assets - the artesian bores, storage tanks and pipes that provide drinking water, the pipes that take away stormwater and wastewater and the $40 million plant where wastewater is treated.
The "carrot" that comes with that agreement is $6.32 million to spend on upgrades to drinking water, wastewater and stormwater.
Tenders have been let to spend the "free money" on upgrading water supply to Sedgebrook St, Parkes Ave and Lincoln, Ngatarua and Mosston roads, a council spokeswoman said.
Other work will follow, and could include connecting Fordell to the town water supply, putting a new waterpipe under the Cobham Bridge and upgrading stormwater pipes.
All the work needs to be finished by March 2022.
The three-year reform programme is to move New Zealand water assets into a small number of publicly owned multi-regional entities. The number and boundaries of those are to be suggested in February-March this year.
After that the Government will decide how the entities are governed and funded and between May and August it will launch a publicity campaign about the need for change. Councils can then decide how they want to participate, board appointments will be made and the new entities established in 2023-24.
At a meeting last August, some Whanganui councillors could see the need for change.
Contaminated drinking water in Havelock North that resulted in campylobacter infections and deaths was one example, McDouall said.
"Now we have a drinking water regulator to make sure councils are doing their job."
New Zealand is dotted with non-compliant wastewater treatment plants, he said, and regional councils are failing to enforce compliance.
Leaking pipes in Auckland and Wellington that allow sewage to contaminate beaches are another proof that improvement is needed, councillor Helen Craig said.
"It's really good that Government has seen that we need some investment."
Whanganui might have high rates, she said, but it has good water and wastewater.
It will take $27 billion to $46 billion to bring all New Zealand's water assets up to scratch, a briefing to Local Government Minister Nanaia Mahuta says. This will be unaffordable without the reform, and especially so for small communities.
But Whanganui councillors were worried about what it might mean.
Auckland's Watercare is an uninspiring example for amalgamation of services, councillor Rob Vinsen said.
Ceasing to rate for water would significantly reduce council revenue, Fell said.
"What's left if water goes? Roading, rubbish, library? And so suddenly you think 'What would council be doing in the future?'" McDouall said.
Councillor Alan Taylor feared losing control of local decision-making, and Vinsen didn't want Whanganui people subsidising a lack of investment elsewhere.
McDouall worried about subsidising smaller councils too, but he said some simply couldn't afford to pay for water infrastructure. He liked the equitable nature of the reform.
"The status quo isn't an option. Something has to change."
Fell felt the change was inevitable, and asked whether the debt that goes with water assets would also be transferred to the new bodies.
"I think it's going to get done to us and we need to be in charge of our destiny and fully understand what it means," he said.