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Government’s Three Waters Reform

Map water entities

Hastings district would be included in Entity C

The Government has announced that it is moving the management of drinking water, waste water and storm water (Three Waters) services away from city and district councils, to one of four entities across New Zealand. The announcement that this process would be mandatory was made on October 27, 2021. You can read the Government press release here.

The Government’s information portal on its reforms is here.

The Government believes its proposal will enable water quality standards to be met consistently across the three waters systems at a lower cost than can be achieved by individual councils.

The proposal will see Hastings three waters systems managed by an entity responsible for 21 councils stretching from Gisborne to the top of the South Island, including Wellington, for a population of just on one million.

 

What is Hastings District Council’s position?

Up until October 27, Government indicated it would allow councils to opt-in or opt-out of the proposal. That has changed, with the Government announcing the proposal will be legislated. That means councils will have no choice but to transfer the three waters assets to the entities, along with planning for new infrastructure and management of existing infrastructure.

There are matters on which Council and the Government agree

Hawke’s Bay’s council’s, supported by Government, has been working on a regional model over the last two-and-a-half years, in recognition that the current model is not fit for purpose.
Council agrees that drinking water standards need to be raised to ensure safe drinking water for New Zealanders, and that our waterways are protected and improved by raising the treatment standards of waste and storm water.

Council also agrees that given the need to raise standards, the current delivery model for water services needs reform. Councils working alone will not be able to adequately finance and manage three waters infrastructure as the standards increase.

Council also agrees that there needs to be a standards regulator, to ensure those standards are met, and an economic regulator, to ensure transparency, efficiencies and an appropriate level of investment into three water infrastructure.

Where we disagree

Where Hastings District Council and our Hawke’s Bay council partners disagree with the Government is on the model, the decision to mandate, and the inability, to date, of residents to have a voice in these decisions.

Government provided councils an eight-week period to provide feedback on the proposed model, with submissions closing 30 September 2021. Hawke’s Bay’s councils provided its submission to the proposal, outlining the concerns gathered through feedback from the community, and requesting that consideration of a regional model be considered

You can read the letter to Government, formally setting out the region’s position, to Government, here.

That request was declined by Government, and the decision to mandate its proposal announced.

Hawke’s Bay’s council leaders have expressed their shock and disappointment at the Government’s decision to make the proposal mandatory. The regional leaders’ response to the decision can be read here.

What will happen now?

The Government’s legislative process will start now. It will include a Select Committee process to which councils, organisations and individuals can submit.

The Hawke’s Bay councils will continue to work together, to formulate its options in response to the mandating announcement, and prepare its submission to the Select Committee

How to provide your feedback to Government

Council is committed to assisting those who want to submit to the Select Committee to do so.

Hastings residents who want to be added to an email database that will be used to advise people of dates and provide links to enable them to take part in the process should complete the form below:

Follow this link if the form fails to load. online form.

Outside of this process, you may also wish to contact your local MP:

Anna Lorck
Labour MP for Tuki Tuki
Anna.Lorck@parliament.govt.nz
Tukituki electorate office
T: 06 870 1470
129 Queen St, East Hastings

FAQs

The Government has announced that it will mandate its plan to transfer the ownership and management of council-owned drinking water, wastewater and storm water from New Zealand’s 67 councils, to four national entities. Each of those entities will be owned by the councils in the area that it covers. In the case of Hastings, the entity will be looking after 21 council areas, from Gisborne to Wellington as well as the top of the South Island and the Chatham Islands, home to just under one million people.

The Government has proposed a complex structure led by representatives of the councils and mana whenua in an entity’s area. A working group is further investigating the structure, however, under the Government’s original proposal, the representative council and mana whenua group will appoint an ‘Independent Selection Panel’ which will appoint an ‘Entity Board’ which will govern the ‘Entity Management’. Each entity will have to engage with its community on strategic direction.

The new entity (owned by all of the councils) will own the infrastructure, both existing and new, and will be responsible for managing it.

Just as they do presently, households, businesses and organisations using the infrastructure will pay for the water services they receive. The finer detail of the payment structure under the Government proposal is not yet known. There is no indication in the proposal that those not connected to the networks will be involved or expected to pay.

Government believes its proposed structure will lead to a much lower increases in costs to those using the three waters infrastructure. A business case completed by the five Hawke’s Bay councils on a regional Three Waters solution over the last two years does not align with the Government’s figures, suggesting the forecast savings are uncertain. The councils are continuing to work through the financial modelling.

Hastings District Council owns three waters infrastructure valued in excess of $1.1 billion. Council has invested in excess of $80 million in drinking water infrastructure alone over the past four years. Across all three waters infrastructure, Hastings District Council has a significant plan in place to replace pipes and expand the network, while ensuring ratepayers get as much value out of the existing infrastructure as possible.

Hawke’s Bay’s councils are in agreement with the Government that the status quo is not fit for purpose in the long term. It will become increasingly difficult for councils working alone to keep pace with the need to improve and expand the infrastructure, particularly as standards across all three waters are progressively raised. Hawke’s Bay’s five councils have been working on a regional model and had asked the Government to consider that model as an alternative to its plan. That request has been declined, and the mandating of the Government’s proposal effectively removes the regional model from the table.

Now that the Government has announced it will mandate its plan, any formal consultation will have to be directly between residents and the Government. While the level of consultation the Government will hold is not yet clear, it has said there will be a Select Committee process to which the public can submit. Council will be making a submission to that process, and will be ensuring residents have the information they need to make a submission.

The five councils of Hawke’s Bay have been working together for nearly two years on a model that would deliver affordable, efficient and environmentally sustainable three waters services to the region. An independent report commissioned by the councils last year showed this was achievable. The region’s councils asked Government to consider a regional model as an alternative to its plan, however that request was declined.

The Government plan is that all current staff will be able to transfer to the new entity, and that more staff will potentially be required. It has explicitly said that staff choosing to transfer to the new entities will retain their current conditions and be able to remain in their current location.

Under the Government proposal, Council will no longer have direct control over the planning and construction of water infrastructure for things like new housing developments or industrial areas. How such planning will be carried out and how works will be prioritised are topics that Council has been seeking more information on.

Government has promised a funding package to councils – available once the plan is in place. The Government says it is to ensure communities are better off under the proposal. It can be used to increase resilience to climate change, to build infrastructure that allow housing development (roads, street lighting etc), to enhance community well-being. The funding that will be allocated to Hastings is just over $34.8m.

The Government’s Three Waters Reform service delivery proposal affects people who use council-supplied services. Non-council-owned water supplies are being looked at separately by Government, through its Water Services Bill. A Government paper, specifically on rural supplies, can be read here

Archived information

Map water entities

Hastings district would be included in Entity C

The Government is proposing moving the management of drinking water, waste water and storm water (Three Waters) services away from city and district councils, to one of four entities across New Zealand.

It believes that its proposal will enable water quality standards to be met consistently across the three waters systems at a lower cost than can be achieved by individual councils.

The proposal, if progressed, would see Hastings three waters systems managed by an entity responsible for 21 councils; for a population of just on one million.

It is important that we all understand what this would mean for Hastings and our wider region, before any decisions are made.

What is happening now?

Council and our regional partners have used this eight weeks to investigate the complex proposal, put questions to Government, gather input from our communities, and provide feedback to Government.

In the wake of that work, on September 30 Hastings District Council submitted a letter to the Government, via the Minister of Local Government the Hon Nanaia Mahuta, formally setting out its position based on the information gathered over those eight weeks. You can read that letter here, and a Hastings District media release setting out its position, here.

The Council meeting that approved the feedback to Government can be viewed here.

On October 1, a letter from all of Hawke’s Bay’s five councils was also submitted to the minister. That letter and accompanying press release are available here (from 5pm on October 1).

Government has indicated that it will now assess the feedback from all councils, but has not provided a time-frame on when the results of that assessment will be available.

What we need to know from Government

  • When, how or even if councils will be able to formally consult with their residents on the proposal.
  • How the governance structure will work in practice; how much influence Council representatives, iwi and a proposed consumer body will have.
  • How new three waters infrastructure will be prioritised to allow for new housing development and increasing economic production.
  • The full impact of the proposal on Council’s business and the wider community, e.g. what stranded costs and services may communities be left with.
  • The full financial details, particularly the costs to residents from day one, and the level of confidence in the cost-saving predictions over 30 years.
  • Whether or not Central Government will simply ‘mandate' this model.
  • Exactly when a decision will be made.

All the information available to date, including the Government’s proposal and the work the region’s councils have done as a group, is on the Hawke's Bay Three Waters website.


 

Quick guide to the Government Three Waters Reform - August 2021

Where is the regional discussion up to?

In 2019/2020 the five councils across Hawke’s Bay (Hastings, Napier, Wairoa, Central Hawke’s Bay and the regional council) completed a joint review of water services across the region, targeted at finding efficiencies by working collaboratively.

The work highlighted the status quo was not the most effective or efficient way to deliver the water services, particularly given the increasing national standards, and the costs involved to achieve them. The outcome was that there were efficiencies to be gained by one entity delivering water services across Hawke’s Bay.

The combined Hawke’s Bay councils have formally asked the Government to consider allowing Hawke’s Bay to continue with its investigations into a regional model.

You can read the report here and watch a video summary below.

Give us your feedback

More than 800 responses were received through our community survey, which ran from September 2 to 19, on the government’s initial three waters management reform proposal.

These responses helped to inform Council’s submission to the government on the proposal. You can read the results here.

While the deadline for this submission was October 1, we are keeping the survey open so people can continue to provide us with their feedback throughout this process.

It’s important to us to hear our community’s views – if you wish to tell us what you think take the survey.

give us your feedback HERE

Q&A Session

On Thursday 16 September we live-streamed a Q&A session through the Hastings District Council Facebook page. You can watch recording of this session below. We would like to thank all those who participated and asked questions.

Three waters: Local or national management?

Talking point: Mayor Sandra Hazlehurst

There has been a great deal of discussion over the last few weeks, nationally and locally, about how three waters (drinking water, waste water and storm water) will be managed across New Zealand.

Many of our people ask me where Hastings District Council stands on the national debate over whether our three waters infrastructure should be owned and managed locally, or by one of the four national organisations suggested by central government.

My response is that we need more information and we need to talk to our community before coming to any conclusion.

So what is the government proposal?

It would see four organisations managing all of the three waters infrastructure and maintenance across New Zealand. The current proposal would mean the entity managing three waters in Hawke’s Bay would be looking after water services for 21 council areas, from the top of the East Coast to the top of the South Island.

What is our situation?

Our Council and our community have made safe drinking water our number one priority.

Since the Havelock North water contamination event in 2016, which severely impacted our community, we have worked extremely hard to bring our drinking water infrastructure up to the highest standards possible.

Our district has spent more than $80 million on drinking water infrastructure enhancements, with all of the major projects due to be completed by the end of next year. That means our new drinking water systems will be in top condition across all of our urban and small community supplies.

Our award-winning $35m waste water plant was built just over a decade ago, it has a consent and it operates to these conditions, and we have long-term asset management plans in place to manage waste water and storm water.

So where does that put us in the very important discussion we are having on who will manage water into the future?

As your mayor, I assure you that we will do everything we can to ensure that no change is made without you having the opportunity to let us and the government know what you think.  

In the meantime, Councils across New Zealand have until October 1 to put our questions on the proposal to government and provide feedback.

We still need more information from the Government, after which we will be in a position to talk to our ratepayers and wider community.

We need to understand how our community will retain influence over the service, how the delivery model will work, how we ensure new water infrastructure is installed where and when we need it as our district grows, and the intricacies of the ownership model.

We also need more information on new regulation standards.

Government has signalled that standards will continue to rise, which will impact on the amount we need to spend on infrastructure and therefore the cost to Hastings households and businesses.

Having this information will help us understand how the government proposal will work at a practical level and estimate the likely cost of meeting those standards.

At the moment, government is saying that the proposal is ‘opt in’ or ‘opt out’.
That means we have a choice: continue to look after our own three waters, or opt in to the government scheme.

Government has said that it will give us the ‘final shape’ of its proposal in October.

This is a decision that will impact generations to come and we must get this right.

A regional approach

For us, much discussion will be held across the region. The four Hawke’s Bay councils, Central Hawke’s Bay, Hastings, Napier and Wairoa, have agreed to work together to analyse the government’s proposal. That will build on work done last year by the four councils with their iwi representatives, which reviewed future costs of three waters management across Hawke’s Bay.

We agreed at the time we started the regional review that affordability, resilience, capacity and capability were all critical elements. That remains the case today.

We look forward to receiving more information from government, seeing its refined plan in October, and then talking to our community and regional partners about the best way forward.

Sandra Hazlehurst
Mayor of Hastings

What is being proposed in Government’s Three Waters service delivery initiative?
The Government is proposing transferring the ownership and management of council-owned drinking water, wastewater and storm water from New Zealand’s 67 councils, to four national entities. Each of those entities would be owned by the councils in the area that it covers. In the case of Hastings, the entity would be looking after 21 council areas, home to just under one million people.

Who will run the entities?
Government has proposed a complex structure led by representatives of the councils and mana whenua in an entity’s area. They would appoint an ‘Independent Selection Panel’ which would appoint an ‘Entity Board’ which would govern the ‘Entity Management’. Each entity will have to engage with its community on strategic direction.

Who will own the infrastructure (pipes, pumps and filtration systems etc)?
The new entity (owned by all of the councils) would own the infrastructure, both existing and new, and will be responsible for managing it.

Who will pay?
Just as they do presently, households, businesses and organisations using the infrastructure would pay for the water services they receive. The finer detail of the payment structure under the Government proposal is not yet known. There is no indication in the proposal that those not connected to the networks would be involved or expected to pay.

How will the Government’s proposal affect residents financially?
Government believes its proposed structure would lead to a much lower increases in costs to those using the three waters infrastructure.
A business case completed by the five Hawke’s Bay councils on a regional Three Waters solution over the last two years does not align with the Government’s figures, suggesting the forecast savings are uncertain.
The councils are continuing to work through the financial modelling.

Haven’t we already invested in water infrastructure?
Hastings District Council owns three waters infrastructure valued in excess of $1.1 billion. Council has invested in excess of $80 million in drinking water infrastructure alone over the past four years. Across all three waters infrastructure, Hastings District Council has a significant plan in place to replace pipes and expand the network, while ensuring ratepayers get as much value out of the existing infrastructure as possible.

Why can’t we just keep managing Three Waters the way we do now?
Hawke’s Bay’s councils are in agreement with the Government that the status quo is not fit for purpose in the long term. It will become increasingly difficult for councils working alone to keep pace with the need to improve and expand the infrastructure, particularly as standards across all three waters are progressively raised. For Hawke’s Bay, the question is whether to opt in to the Government scheme, or continue along the path of developing a regional proposal.

Will Council formally consult with the community before any decisions are made?
Once Government confirms the next steps in its programme, including if and how it sees community engagement being carried out, Council will be able to advise its process. Council’s intention, subject to those Government decisions, is to fully consult with Hastings residents.

Could we develop a Hawke’s Bay version of the proposal?
The five councils of Hawke’s Bay have been working together for nearly two years on how they could develop a model that would deliver affordable, efficient and environmentally sustainable three waters services to the region. An independent report commissioned by the councils last year showed this was achievable. The councils will continue working together to analyse the Government proposal and include the regional work in our response to Government.

How will the Government proposal impact staff currently managing the Three Waters systems?
The Government proposal is that all current staff would be able to transfer to the new entity, and that more staff would potentially be required. It has explicitly said that staff choosing to transfer to the new entities would retain their current conditions and be able to remain in their current location.

Who will decide what new services will be built and when?
Under the Government proposal, Council would no longer have direct control over the planning and construction of water infrastructure for things like new housing developments or industrial areas. Council requires more information on how the planning and construction of new infrastructure would be prioritised over such large geographic areas to see if local needs can be met.

What is the money for that Government is giving councils if they ‘opt in’ to the system?
Government has announced a funding package that would be available to councils that opt in to the scheme. It is to ensure communities are better off under the proposal. It can be used to increase resilience to climate change, to build infrastructure that allow housing development (roads, street lighting etc), to enhance community well-being. The funding that would be allocated to Hastings is just over $34.8m.

How does the Government proposal affect rural residents?
The Government’s Three Waters Reform service delivery proposal affects people who use council-supplied services. Non-council-owned water supplies are being looked at separately by Government, through its Water Services Bill. A Government paper, specifically on rural supplies, can be read here

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