Three Waters Reform

In July 2020, the Government launched the Three Waters Reform programme – a three-year programme to reform local government three waters service delivery arrangements

How water reforms impacting our Council.

The three water reforms are mandatory now for councils. There are four entities that are being formed that will cover the country that will oversee water services. Our area will be covered in Entity B

There’s now a transitional process happening so that the Entities will be managing three waters by 2024.

In April 2022 the Minister for Local Government announced Councils can now access the Three Waters reform better off support package as part of that transitional process.

The funding provides an opportunity to fast-track projects that might not otherwise have got off the ground – or that couldn’t previously progress due to lack of funding. Councils can create and accelerate projects that build resilience to climate change and other natural hazards, deliver infrastructure that supports housing development, or enhance local placemaking and community wellbeing.

The first $500m of the $2 billion total better off package is available from 1 July 2022, with applications open until 30 September.

Our Council is expected to receive approximately $16 million. An internal staff working party has been set up to assess and plan on what it may be used for. We will consult on what the money is proposed to be spent on in next year’s 2023-2024 Annual Plan.

The Shareholding Allocation Model

The government has also announced that councils will receive non-financial shares in the new entities, with each council getting one share per 50,000 people in its district, rounded up so that each council has at least one share.

Under this plan, our district, with a permanent resident population of approximately 33,000 would have one share in Entity B, which covers much of the central North Island. This is the same share as little Kawerau, with a population of 7,670. tricts such as Thames-Coromandel and Queenstown Lakes will be severely under-represented in the government’s shareholding scheme for the new water service entities and lose out in the financial support package – both of which are based on normally-resident population.

As popular visitor destinations,the Thames-Coromandel and Queenstown-Lakes mayors have gone public to say using resident population puts both their districts at a disadvantage.

“Our population can double on a long weekend and goes up 400 per cent over the summer,” says Thames-Coromandel Mayor Sandra Goudie. “We’ve got to supply clean water and wastewater services for all of them. We have nine wastewater treatment plants and nine drinking water plants – Hamilton has one of each. There’s an inequity in the financial support and shareholding aspects of the reforms. The government allocation model puts our districts permanently and historically at the bottom of the rung with the allocation of funding,” says Mayor Sandra.

“With allocation based on resident population on census night our 52 per cent absentee ratepayers (they live elsewhere) means we only get half of what we should be getting,” says Mayor Sandra. “This is further compounded by the explosion of population during holiday periods. “With the allocation model with the Three Waters, our district is looking to be allocated $16 million, whereas we should be getting $32 million,” she says.

 "Like other areas in Aotearoa New Zealand that are a visitor hot spot we have a high number of non-resident ratepayers that maintain holiday homes which they visit regularly and rent out. On top of that a peak day can see in excess of 50,000 visitors in our district. With roughly 48,000 residents that’s three waters infrastructure servicing nearly 100,000 people. Within ten years that peak day figure will reach nearly 150,000. How can it be appropriate that our district is allocated just one share?” Says Queenstown Lakes Mayor Jim Boult.

In Queenstown-Lakes, the figure allocated is $16.13 million. “Within a short timeframe demand on our infrastructure will be getting up there with the likes of Dunedin and Tauranga which are receiving funding allocations of $46 million and $48 million respectively,” says Mayor Jim. 


 

Our Council’s action on water reforms   

We are one of 33 Councils who have signed up as a member of Communities 4 Local Democracy, He hapori mo te Manapori”.

This is a local government action group was formed to respond to communities’ serious concerns about the Government’s mandated Three Waters Reform model and the implications of this proposed legislation. Communities 4 Local Democracy says it’s committed to working with central government so all New Zealanders have access to safe drinking water and that all communities continue to have a say on the use of assets purchased on their behalf using ratepayers funds.

This decision was made at a special Council meeting on 6 April 2022, as part of our position on the government’s Three Water Reforms. The resolution was five passed five votes to four.

Becoming a member of this action group is non-binding and our Council can opt to withdraw as a member anytime.

Currently there’s 32 other Councils affiliated.

Water reform map

You can read the full report here 

 Meanwhile, the Working Group on Representation, Governance and Accountability of new Water Services Entities has reported back to the Minister for Local Government Nanaia Mahuta with 47 recommendations which you can read here 

The Government has signalled its bottom lines are:

  • the entities remain in public ownership, 
  • the entities have balance sheet separation from their local authority owners, 
  • good governance, 
  • and that any new model should protect/promote iwi/Māori rights and interest

Background 

The reforms had initially been progressed through a voluntary, partnership-based approach, and in 2020, our Council agreed to opt into the early stages of the reform package. This did not commit our Council to further reform or to transfer of assets. 

Our Councillors have since been listening closely to our communities and the very clear message they’re getting is that we must hold the line on our water infrastructure staying in our local ownership. 

Our Council relayed our communities’ key positions through a formal feedback process in October 2020. Shortly afterward, government announced the reforms would be forced through. 

Our Council continues to listen to community opinion and input on the next stage of reform, in order to advocate strongly on behalf of our communities, and to ensure we retain whatever local powers are possible. 

Through the next stage of the reform programme, our Council intends to fight for:  

  • Water and water-related infrastructure assets to remain in local ownership. 

  • Local voices to have a place in planning and service delivery.  

  • Assessments about our district to be made on rateable household property numbers, rather than usually resident population. 

  • Local determination of the entity boundary that is most appropriate for our district, based on community feedback. 

Our Council signed up to the first phase in August 2020, which came at no commitment to opt in or out to further phases and has allowed our Council to be part of the discussions regarding this reform. It also allowed our Council to receive nearly $5M in funding which has been allocated to the Whitianga water meter project. This does not constitute Council support of the reform proposals.

If you have questions regarding this reform, feel free to contact our Council at threewaters@tcdc.govt.nz

What does it mean to be in Entity B?

At the Local Government NZ (LGNZ) Conference in mid-July 2021 the Government announced a $2.5 billion package for councils as part of its three waters reform.

The package has three financial components:

  1. Support for local government to invest in communities’ wellbeing. This part of the investment totals $2 billion, with $500 million being available from 1 July 2022. It will be allocated between councils according to a nationally consistent formula, reflecting population (75 per cent), deprivation (20 per cent) and land area (5 per cent).
  2. Targeted support to ensure no councils are financially worse off as a result of transferring their three waters assets. This is designed to protect councils from any negative financial consequences of the asset transfer.
  3. Cover of reasonable transition costs. This is intended to make sure council service delivery (including of water services) during the transition isn’t compromised by the work needed to make the transition happen. It is also noted that staff who work primarily on water will be guaranteed a role at the new water service entities
We want to hear from you

Send us your own thoughts and points of view on the reforms and how it could affect the Coromandel: threewaters@tcdc.govt.nz.

Where can you find more information on the reform 

You can see the overview of the programme here

You can also read more information on the reform programme on the DIA and LGNZ websites. 

So, what do other councils think?

You can find out what other councils around New Zealand think of this reform here

 

 

 

The funding provides an opportunity to fast-track projects that might not otherwise have got off the ground – or that couldn’t previously progress due to lack of funding. Councils can create and accelerate projects that build resilience to climate change and other natural hazards, deliver infrastructure that supports housing development, or enhance local placemaking and community wellbeing.

The first $500m of the $2 billion total better off package is available from 1 July 2022, with applications open until 30 September.