Council reviews Three Waters Reform position

Rotorua Lakes Council has today reviewed its position on the Government’s Three Waters Reforms proposal with elected members agreeing they do not support the proposal as it currently stands.

They also agreed on a number of issues central to their position.

In July 2020, the Government launched the Three Waters Reform Programme which proposes establishing four entities to take responsibility for delivering three waters services (drinking water, wastewater and stormwater) across New Zealand. Rotorua would be one of 22 districts in ‘Entity B’.

The first piece of legislation to enable the proposed changes, the Water Services Entities Bill, has now been introduced to Parliament.

Rotorua Lakes Council adopted a preliminary position last September which was submitted to the Government. While the Council broadly agreed with the drivers for change and had already adopted infrastructure risk mitigations in its 30-year Infrastructure Strategy, it considered there were fundamental gaps in the current reform proposal that must be addressed in order to strengthen the proposal and to uphold the reform’s underlying core intentions (see more HERE).

What the Council resolved today:

It is agreed that Council does not support Government’s Three Waters Reform proposal.

Identified issues:

• An ongoing lack of clarity on many key aspects of the proposal;
• A central concern about the likely lack of responsiveness of the proposed reforms to the future needs and aspirations of the Rotorua community;
• A view that the proposed governance structure is overly complicated and unlikely to provide effective direction;
• Lack of clarity on future costs arising from overhyped efficiencies;
• The lack of consultation with the Rotorua community;
• A view that the centralised nature of the entity will result in a loss of flexibility to respond to local unique needs and mana whenua requirements;
• An approach to transition which overly relies on Council resources to the detriment of existing work programmes.

Council also resolved to:

• Direct staff to submit to Government on the identified concerns outlined in the presentation elected members were given at today’s Council meeting;
• Direct staff to continue to engage with the implementation group but not to the detriment of existing work programmes.

Today's resolutions followed a presentation on the reforms programme by Rotorua Lakes Council Deputy Chief Executive Infrastructure and Environment, Stavros Michael.

He provided an update on the reform programme and outlined a variety of issues which he saw with the proposal as it currently stands.

While it remained difficult to disagree with the drivers for change and the Government’s objectives, he said there remained a lack of clarity and detail and it was difficult to see how local priorities would be given due attention by the large entities proposed and how partnerships which had been forged with local iwi would be honoured.

The main focus for Council was on the service, not asset management, Mr Michael said. He questioned whether there would be space for meaningful local input amongst the “clutter” of an entity servicing a population of about 800,000 across all 22 districts.

He said there was still a lot of work to be done to provide the clarity needed to fully understand how the transition of services would be managed and how they would benefit communities.

View the presentation Mr Michael spoke to at today’s meeting HERE

View the report on this matter by going to p56 of the meeting agenda HERE. The report includes a copy of Council’s preliminary position which was communicated to the Government last year.

Find out more information about the proposed reform HERE on the Department of Internal Affairs website.

Read the Water Entities Bill that is currently going through the Parliamentary process for new legislation HERE. The Bill covers proposed ownership, governance and accountability arrangements for the four proposed three waters entities.

You can have your say on the Bill by making a submission to the Select Committee. See more HERE about how to have your say.

See HERE on Council’s website for access to more information about the reforms and all Rotorua Lakes Council updates relating to the reforms

Three Waters “better off” funding

Also at today’s Council meeting elected members approved Rotorua Lakes Council applying for $8.05m in funding to which it is entitled as part of the first tranche of Three Waters Reform “better off” funding.

In July 2021, the Government announced a $2.5billion funding package - $500m “No Worse Off” funding – designed to ensure that no local authority is financially materially worse off to provide community services as a direct result of the reform; and $2 billion “Better Off” funding – positioned as “funding to invest in the future of local government and community wellbeing, while also meeting priorities for central government investment”.

An application must be made by September this year.

It was noted that making an application does not bind the council to supporting the Three Waters Reform or prevent the council from expressing its views on the reform.

Council must indicate what it intends to spend the allocation for which it is applying on and elected members today supported the project evaluation and prioritisation approach proposes for the Rotorua Lakes Council.

A report will go back to elected members once the evaluation has been completed, with recommendations for elected members’ approval.

Details of the “No Worse Off” funding is to be announced at a later date as the transfer of assets and responsibilities as part of the 3 Waters Reforms begin.

The “Better Off” funding package is intended to be:

• An investment by the Crown into the future for local government and community wellbeing and to recognise the significance to the local government sector and the communities they serve of the transfer of responsibility for water service delivery.
• Better Off amounts for each local authority was determined using a formula based on population, land area and deprivation index score.
• The allocation for Rotorua Lakes Council is $32.19m in total, split into $8.05m in tranche 1 and $24.15m in tranche 2.

As it is not a contestable process, funding proposals submitted by councils will be assessed against defined priorities and criteria and accepted or rejected based on their alignment with these.

Today’s decision followed a report to the Strategy, Policy & Finance Committee. Go to p20 of the agenda (HERE) for that recent meeting to view the full report on this matter. The report includes outlining the fund criteria, application process and timeline, details regarding RLC’s approach to screening projects/initiatives for inclusion in application for funding.

Attachments with further information are available on Council’s website – see links below:

Attachment 1 - Three-Waters-Reform-Better-Off-Support-Package-Guidance-April-2022.pdf

Attachment 2 - Better Off Council FAQ Responses.pdf

Attachment 3 - DIA Pro-forma-Better-Off-Support-Package-Funding-Proposal-April-2022.pdf