Three Waters Reform 2021 Consultation

Thank you for your interest

The Manawatū District Council collected feedback on the government's proposed Three Waters Reform between 31 August and 29 September 2021. The consultation period has now closed.

Please read below to see the information provided during the consultation period.

A message from the Mayor

The Government is proposing changes to the way our drinking water, stormwater and wastewater services are delivered to residents through a Three Waters Reform.

The Government has given councils until the end of September to provide feedback on the proposed reform. Before we provide this feedback, we are keen to hear from you and what our community thinks.

Currently most three waters assets and services in New Zealand are owned and delivered by local councils and are paid for by rates. The Government is proposing that three water services move from the 67 councils, who currently manage these, into four large entities.

Councils in each entity will collectively remain the 'owners' of the entities on behalf of their communities with mana whenua having a joint oversight role. Three waters assets and services delivery will remain in public ownership with protections proposed in legislation against privatisation. There will be no shareholding or dividends.

Manawatū District would become part of Entity C that covers the eastern side of the North Island, from Gisborne to Wellington and the top of the South Island, with a complicated governance arrangement. Entities will be governed by independent boards of expertise. Each entity will have a regional representative group made up equally of local authority and mana whenua appointees, who appoint an independent selection panel that in turn appoints board members for each entity. It is unlikely Council and our residents would have a strong say or influence in local matters under this arrangement.

Currently Manawatū District Council provides roading and three waters infrastructure to the Rangitikei District under a shared services agreement, but Rangitikei would sit under Entity B in the proposed three waters reform.

You can find out what this governance structure is proposed to look like by visiting this site.

The fundamental question our Council is considering: “Will the three waters reform proposal benefit the Manawatū District Community?”

We all agree that quality drinking water and environmental outcomes are a good thing for us all. At the moment it’s not clear whether the proposed reforms are the best way to achieve this, and what the advantages are for our District.

The information enclosed provides some background based on the best information to date and outlines the details of the reform process. We ask that you read and share your feedback by 5pm, 29 September 2021.

We understand the Three Waters Reform proposal is complex. Your Councillors and I will be available at a series of meetings once we get to COVID lockdown level 2, to discuss the reform proposals and answer any questions you may have. Details of these are in the enclosed information sheet.

You may have read in the local papers and online your Council’s concerns regarding these reforms. One of our concerns is that councils such as Manawatū District, which has invested well into very good infrastructure, will be subsidising those communities who haven’t. We are also concerned at the proposed Governance and Management structure and the probability that we will have little influence in the future.

Your Council’s position remains that, based on the limited information presented so far, we have strong reservations about joining the Government’s reform programme at this point. We are not convinced that there are enough benefits for the Manawatū District community and we need to hear from you before reaching a formal decision.

I don’t think anyone is fundamentally opposed to discussing new ideas and ways of doing things. But rushed government reform without adequate time to consider the consequences, and without listening to those affected and who will pay, is in no one’s interest.

However, it is important that we know what you think so that we can make a well-informed decision that is best for our District.

Once we have reviewed all feedback, the Council will meet in late September to consider its position and respond to the Government’s proposal. We will keep you updated on how this progresses, through our website and Facebook page.

We look forward to receiving your feedback.

Yours sincerely

Helen Worboys
Mayor, JP

Key Facts

Why is there a Three Waters Reform?

The Government has concerns around the regulation of three waters services, and the capability, capacity and efficiency of the service currently delivered by councils.

The Government’s objectives:

• Affordability – in some areas it’s becoming unaffordable for councils, especially for smaller councils with fewer ratepayers, to provide safe and reliable drinking water, and fit for purpose wastewater and stormwater services.
• Service level consistency – with many councils providing three water services, some communities receive a different level of service to others. The reform aims to provide a more consistent level of service across the country.
• Underinvestment in critical infrastructure - through stage one of the reform process, the Government concluded that there is underinvestment in three waters infrastructure across parts of the country. There may be large costs over the next 30 years as infrastructure is brought up to standard.
• Inability to meet requirements - with both a new water regulator and new economic regulator, there is a concern councils may not be able to meet future requirements without the reform process.
• Climate change - increased flooding and sea level rise will put pressure on three waters services if not adequately managed. The Government is concerned about the ability of councils to meet this challenge without reform.

More information is available on the Department of Internal Affairs website.

Key considerations for Manawatū District

We understand the importance of exploring alternatives to make sure three waters services are delivered in the best way possible, which is why our Council took part in the first stage of the reform.

However, Council has now written to the Government asking for a pause and a review of this proposed reform for several reasons:

• The current COVID lockdown has stifled opportunity for full discussion and engagement as our Council team are heavily involved in the welfare needs of our community.
• Councils needs more time and discussion with DIA on key unanswered questions about the impact of this reform, including what the ‘opt out’ option will look like.
• It is essential and legally required for Councils to properly and authentically engage with our communities and iwi on the future of their assets.
• This proposed reform needs to be put into context with multiple other reforms and changes happening in local government, especially the future direction and outcomes of the local government review, and the RMA reform.
• Our Council has genuine concerns regarding our community not being in control of our own destiny in respect to three waters decision-making, and not being able to make nimble decisions around growth and development.
• The governance structure looks cumbersome, and a Council of our size would not realistically have a chance to have any influence. This is of concern.
• Our Council disagrees with the financial modelling that we have received from DIA, and the assumptions behind the modelling. Frankly we do not accept the projected cost differences for ratepayers.
• There is a real unease in our community about handing over assets worth circa $250,000,000 net that have been paid for by the community.
• Stranded overheads are a real concern to our Council. We would see that rural ratepayers who in many cases are not connected to three waters infrastructure would have to pay a share of the stranded overheads. Our Council is impacted more than most, as we provide all roading and three waters services to our neighbouring Rangitikei District Council through a shared service agreement. If this proposal proceeds the 2 Councils would be in different water entities.
• Our MDC three waters infrastructure is not broken, and does not need fixing. There will always be a requirement for improvements and upgrades.
• One of the alternative models that should be considered in the opinion of our Council is to have the water regulator to set the standards, and a FAR* rate similar to the roading FAR rate to support Councils achieve the required standards.
• The Scottish Water model has been put on a pedestal as the preferred model by our Government, however a recent BBC article painted quite a different picture in respect to the success of that entity. This model needs to be reconsidered.

What we are presenting is the best information we currently know.

* funding assistance rate

Key Statistics

What are the options?

There is the possibility that even if the Council decides to opt out of the reform, the Government may choose to pass legislation to make joining up mandatory by law. While this is a possibility, we still think it is important to hear the views of our community before making a decision. Remember, we are in the discussion phase only and a final three waters reform proposal is still to come from Government.

Our current choices

Opt-in

If Council decides to opt-in to the reform process, it means that by 1 July 2024, three waters services would be removed from the Council and would be provided by four new three water entities across New Zealand.

Our Council would receive a one-off payment of $15 million as a support package for the transfer of our three waters assets and associated debt.

Opt-out

If Council decides to opt-out of the reform process, provision of three waters services would remain with the Council. How this fits in with the Government direction if it still proceeds with the national reform, is yet to be determined.

Tell us what you think

We welcome your feedback about the Three Waters Reform based on the information available to date. Most importantly we want to know the reasons for your feedback. If you are in favour of Government’s proposed reforms, tell us what you like, about the proposal.

Alternatively, if you are not in favour of Government’s proposed reform tell us what you don’t like. Either way, we want feedback on what you think needs to be considered if the reform goes ahead.

Meetings

Council held the following community meetings with COVID-19 safety precautions to discuss the Three Waters Reform.

• Tuesday 14 September @ 7:00pm - Kimbolton Community Hall
• Wednesday 15 September @5:30pm - Manawatū District Council Chambers
• Wednesday 15 September @ 7:00pm - Manawatū District Council Chambers
• Thursday 16 September @ 7:00pm - Te Kawau Rec Centre Rongotea

The meeting on Wednesday 15 September was livestreamed and can be viewed below.