The risks of opting in or out of a nation-wide reform of council waters services infrastructure were highlighted by Invercargill city councillors at a risk and assurance committee meeting this week.

The Department of Internal Affairs last week (March 17) led a council workshop in Wanaka for elected representatives and officials from several South Island local authorities.

Invercargill councillors Ian Pottinger and Nobby Clark were among those who went to the workshops to learn more about the Government’s three year programme affecting the drinking water, wastewater and stormwater assets and services of 67 councils around the country.

The reforms follow on from the establishment of a water services regulator in 2019 – Taumata Arowai – and the introduction of new legislation, the Waters Services Bill, which is currently before Parliament’s Health Select Committee.

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If the bill is passed, Taumata Arowai will regulate local authority drinking water, waste water and storm services instead of the Ministry of Health. This change is projected to occur in the second half of this year.

The Three Waters reform raises the possibility of a South Island coalition of local authorities managing water assets for a wide region. 

The Invercargill, Gore and Southland district councils last year signed a memorandum of understanding to further the investigation of the reforms with Southland District Council employee Matt Russell seconded to lead the project on behalf of 10 territorial authorities around the Otago and Southland regions.

Invercargill councillors’ concerns about the Three Waters reforms were raised several times during the risk and assurance committee meeting.

Cr Ian Pottinger noted there were risks attached to either opting in or opting out of the national reforms. He asked which option was best and how would the Three Waters reforms fit under the framework of the council’s long-term (10 year) plan.

The risk of opting into the reform would mean the council’s asset renewal programme would not stay in place. But opting out brought compliance risks, he said.

Deputy mayor Nobby Clark said he was concerned about the costs of the Three Waters reforms and asked what the council’s future investment might be if the council decided to opt into a Three Waters coalition.

If an Otago-based coalition took over the Three Waters infrastructure that would take “a huge chunk of our business,” Cr Clark said. 

He noted any transfer of Invercargill City Council assets to a coalition would also mean some debt would also transfer.

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Independent chairman Bruce Robertson said Three Waters was a “significant challenge on the horizon” and it was important to get up to speed with the reforms.

The council would have an opportunity to deal with those issues in a workshop in June and at some stage would need to put a separate governance framework in place for the reforms, Mr Robertson said.

The Government last year announced a funding package of $761 million to provide immediate post-COVID-19 stimulus to local authorities to maintain and improve three waters infrastructure, support reform of local government water services delivery arrangements, and support the operation of Taumata Arowai.

The Government subsequently set aside $41.2 million for Otago councils and $22.31 for Southland councils from the Three Waters stimulus package.