Rural mayors fear water reforms will prompt merger of smaller councils

Tuesday, 9 March 2021

The Waikato River supplies water to Auckland and many other towns and cities along its course.

Rural mayors fear centralisation of water services will trigger mergers of smaller district councils around the country.

But the Minister for Local Government Nanaia Mahuta said this wasn’t on the agenda.

Local Government New Zealand [LGNZ] and Taituarā, formerly society of local government managers, would work with councils on “potential opportunities” should they no longer be responsible for providing water services.

Waitomo Mayor John Robertson said plans to set up regional entities to manage water services could mean a 20 per cent drop in income for some rural councils.

Waipā District Council’s Te Tahi Water Treatment Plant processes and pumps water to Pirongia and Te Awamutu.

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Waitomo Mayor John Robertson said handing over water services to a central entity will reduce councils’ income.

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For the Waitomo District Council, it could mean a loss of about $7m, from a revenue base of $32m.

Local Government Minister Nanaia Mahuta says there are no plans for council mergers but the way water services are delivered to communities needs to change.

“We haven’t done a full analysis on what the impact could be for Waitomo but we will need to look at how we structure the council financially,” Robertson said.

“That could lead on to a wider conversation about smaller councils versus larger councils and whether restructure of local government should take place.”

The Government is reviewing how to improve regulation and supply of drinking water, wastewater and stormwater, called the Three Waters Review.

Waipā Mayor Jim Mylchreest said councils’ functions and role in the community will change after the Three Waters Reform.

It included setting up a new regulator, Taumata Arowai, to look after water services.

In a statement, Nanaia Mahuta said anecdotal instances of poorly performing water services were now frequent.

There were reports of lead in the water, E Coli contamination, permanent boil-water notices, ageing and breaking sewer pipes on city streets, sewage discharges in rivers and lakes, and beaches you can no longer swim at or gather kai moana from.

“Under the current system of 67 councils providing separate services, many communities will in future not be able to afford the water services they need and should expect,” Mahuta said.

Matamata-Piako Mayor Ash Tanner said the water reforms were not needed.

“The costs are likely to be greatest for smaller rural communities.”

The Government proposed publicly-owned multi-regional water entities to share and reduce costs significantly compared to the status quo.

John Robertson said questions remained.

Local Government New Zealand President Stuart Crosby said a review of councils’ roles in their communities was needed.

“Would someone in Te Kuiti be expected to pay the same price for their water as someone in Hamilton?

“Are they going to transfer the assets and the debt, from councils to the new entity?”

Matamata-Piako Mayor Ash Tanner said he could not understand the reasoning behind the water reform.

“Some councils need a bit of help but our council has always supplied good water.

“Ultimately what we are talking about here is a restructure of local government. If you take three waters out of council control, what’s left?”

A roadshow kicked off to update councils on the review and to provide a chance to ask such questions.

Waipā Mayor Jim Mylchreest said the review, and another one on the Resource Management Act, may force councils change their functions, “rather than their geographical boundaries”.

“While there may be some subtractions [like water management], there may also be some additions.”

That backed LGNZ’s view that councils could take on new roles in social housing, health, education and employment.

The Mayors Taskforce for Jobs was held up as one example, where rural councils had success moving young people into employment and training, backed by Government funding.

LGNZ President Stuart Crosby said the RMA and water reforms were significant which was why LGNZ wanted them joined up in a “Future of Local Government” programme.

It had been more than 30 years since the last review of councils and the “Future” programme would be about the “role and function of local government” for the next few decades.

Crosby agreed most rural mayors were “very nervous” about the water reform and the impact it would have on councils’ finances.

Jim Mylchreest said large sections of regional New Zealand were being centralised, gutting communities of their services, such as hospitals, banks and schools.

“Towns like Te Kuiti used to have a full complement of Government departments, but now they’ve all gone.

“Councils are now one of the biggest employers in their towns and if they disappear, it will just be the nail in the coffin, we will be unable to look after the communities we represent.”

The Government planned to announce the reform proposals mid-2021, councils would then consult with their communities on the programme.