Three Waters Reform

Local councils currently own and operate the three waters infrastructure and provide the services for their districts. In 2020 the Government believed this service delivery model needed to change and they proposed to establish four large publicly owned water service delivery entities.

These entities would own and manage the drinking water, wastewater and stormwater infrastructure for local communities, instead of councils.

In June 2021 the Department of Internal Affairs (DIA) released a map showing the proposed boundaries of these entities.

Stratford District Council (SDC) was part of Entity B with 21 other councils in the wider Waikato, Bay of Plenty and Taranaki regions which would have serviced approximately 800,000 people.

Along with transferring the water assets to Entity B, all of Council’s associated water services debt and reserves would have been passed to Entity B.

The government proposed that the new water entities will be operational from 1 July 2024, and it was expected that councils will continue to deliver water services until then.

The Government was implementing reform of water services through a suite of legislation. Details of this process and the changes made throughout can be found archived on the DIA website here.

In 2021 the Government asked us to examine the facts and figures in front of us, to determine the impact the reforms would on service delivery and our community.

Staff and elected members reviewed the large volume of information provided to determine what is being proposed and why.

At that stage Council was yet to form a collective view on the reforms, but instead asked questions and raised concerns alongside fellow Entity B councils.

Some concerns and questions raised across Entity B included:

• Effectiveness of governance representation
• Loss of community influence
• Will ratepayers actually be better off financially?
• What will the impact be on the rest of Council services?

Council provided a letter of feedback to Central Government on 30 September 2021. Read the letter here.

At the time of Council's feedback in 2021 there was clear commitment from all stakeholders for the need to spend more time working through some issues that are important to all of us. These are:

• Ensuring all communities have both a voice in the system and influence over local decisions. This means being sure the water entities understand and act on communities’ needs and wants.
• Effective representation on the new water entities’ oversight boards so that there is strong accountability to the communities they serve. This includes effective assurance that entities remain in public ownership and cannot be privatised in future.
• Making sure councils’ plans for growth are appropriately integrated with water services planning.

Feedback taken on board

As a result of widespread opposition to a number of elements of the reforms, three ministerial working groups have been set up to further investigate and recommend alternatives to specific aspects of the proposed reforms. The following working groups were tasked to address specific areas of concern:

• Rural Supplies Technical Working Group
• Planning Technical Working Group
• Working Group on Representation, Governance and Accountability of new Water Services Entities

The Working Group on Representation, Governance and Accountability of new Water Services Entities made 47 recommendations in its working group report, 44 of were accepted by the government at the time.

A summary of the recommendations and the government’s response to each of them can be found here.

As part of the reform proposal the Government promised to deliver a financial support package to all councils. This was to ensure that no council is left worse off after the reforms.

If the reforms had gone ahead as proposed, SDC was to receive $10 million in financial support as part of the package.

This was on top of $2.34 million which SDC accessed as part of stage one in 2020. All councils agreed to that stage, which didn’t commit us to the reform programme at the time. The money was used to provide an additional water trunk main for the Stratford water supply, a project which was completed in 2023.