Joining forces on water services will be ‘optional’ for councils – but the government’s retaining the right to make them partner up, writes Catherine McGregor in today’s extract from The Bulletin.
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Forced amalgamation on the table
Councils could be forced to amalgamate their water services under new legislation previewed by ministers Simeon Brown and Andrew Bayly on Thursday. The initial outline of the government’s plan for a Three Waters replacement was first revealed in February, and now the details have been filled in. As already established, neighbouring councils will be able to join forces to create a multi-council-owned water service provider, or go it alone if they wish. However, as Thomas Manch notes in The Post, “there has been concern that some councils might be left in the cold, as larger neighbours decide against combining water services with them”. Brown says the legislation will include a “backstop” to allow forced amalgamation, but has refused to say what might cause the government to step in. Once the law passes in the coming weeks, councils will have 12 months to finalise their plans.
The government is also tweaking some water quality standards which it says have hampered the ability of the Water Services Authority, Taumata Arowai, to do its job.
Controversy over CCO budgets continues
Three Waters stipulated “balance sheet separation”, which would have divided the accounts of the new council-controlled organisations (CCOs) from those of the councils themselves. Under National’s plan, however, councils will own the water entities and fund debt through “ringfenced” revenue – “most likely from charges obtained for water usage, measured by water meters, but this will be determined by councils”, explains Manch. The debt required to fund desperately needed new infrastructure will be supplied at below-market rates by the Local Government Funding Agency, reports RNZ. The new water entities will be able to borrow five times their revenue – much more than other CCOs – subject to “prudent credit criteria”.
Brown says the new funding plan will allow the water entities to source the funding they need “while minimising costs on ratepayers”. However Labour local government spokesperson Kieran McAnulty says the government’s plan doesn’t stack up. “There’s a clear reason why this wasn’t pursued [under Labour]. It’s because the credit rating agencies made it very clear that unless there was balance sheet separation, the savings that are required wouldn’t be found.” With councils ultimately responsible for the debt, the result would be “ongoing rates increases” for householders, he said.
Wellington Water chief executive out
After months of damaging news stories about her leadership, Wellington Water CEO Tonia Haskell has announced her resignation. In May it was revealed that the agency had made a $51 million dollar mistake in its budget, forcing the five Wellington councils to find up to $20 million extra in their long-term plans. In late July, an independent review of the circumstances that led to the error was scathing about the agency’s performance, finding “a lack of strategic leadership at the highest levels of the organisation, and wider problems of organisational culture”. Wellington Water board chair Nick Leggett said uncertainty over the government’s water plans could have contributed to the problems. “The anticipation of imminent water reforms may have made Wellington Water too timid in addressing much needed change in its organisation.” Following news of Haskell’s resignation, Upper Hutt mayor Wayne Guppy, whose council was hardest hit by the budget blunder, said he thought Wellington Water would struggle to find a short term replacement for her, given the government’s announcement that a new entity is imminent.
Councillors walk out over road project downsizing
Staying with local government in the capital, on Thursday three Wellington councillors walked out of a committee meeting, having refused to vote on a plan to downsize the controversial Thorndon Quay roadworks project. The committee had been asked to vote on reducing the number of raised pedestrian crossings on the street from five to two, after the project lost funding from Waka Kotahi. Councillor Ben McNulty said he didn’t want to make a snap decision based on “reckons” not evidence, reports RNZ. “I just feel fundamentally uncomfortable about playing the role of traffic engineer here, so I’m going to leave the room,” McNulty said. After councillors Diane Calvert and Nureddin Abdurahman followed him out the door, the vote passed. One commentator who will be happy about the downsizing is The Spinoff’s Joel MacManus, who wrote last month that “the proposed design goes way overboard. It’s a big-budget, gold standard approach, but it goes against the primary aim of the project. Raised crossings and excessive traffic lights will make bus and bike access worse, not better.”