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29 September 2021

Masterton District Council wants clarity on a substantial number of issues before it is able to make a decision on the Government’s proposed Three Waters Reform Programme.

The Council discussed its response to the Government’s call for feedback at an extraordinary meeting today, with councillors expressing major concerns about information provided to date.

The proposed reforms, announced in June, would see councils handing over management of drinking water, wastewater, and stormwater to four entities covering the whole country.

“Councils have been asked to provide feedback, and we will be giving that feedback,” Mayor Lyn Patterson said.

“There are major gaps in the information provided. When we see the final model for the reforms, and how communities will be consulted, that is when we can make a decision on opting in or out to these proposals.

“At this stage, we have to see this feedback process through to the end to enable us to make the best decision for our community, based on what the Government’s final proposal contains,” she said.

The Mayor said the lack of clarity was significant.

“There are far too many unknowns for us to make any decisions on whether we would be willing to support the current Government proposals,” she said.

“Our feedback to the Government reflects this.

“Furthermore, the Government has not yet undertaken any public consultation with the communities they are asking to hand over their assets.”

The Council also noted that under current legislation making a formal decision on the proposed regional options would not be lawful under current legislation, because the Local Government Act 2002 prohibits councils divesting ownership or interest in a water service, except to another local government organisation.



Masterton District Council’s feedback to the Government on the Three Waters Reform Programme is:

  • Process and engagement: The process and lack of clear information on the proposed reforms for communities has put the Council in a challenging position where we feel we are fronting the Government’s reform programme with our Iwi partners and communities.  We have found it challenging to provide robust information to our communities on the reforms proposals or to provide feedback to Government given the lack of engagement with the community to understand their concerns and position.
  • Community voice:More clarity is required for how councils and communities would have input and influence into the planning processes and investment prioritisation of the water services entity (WSE) to ensure that this aligns with local needs and outcomes.  It is also not clear how the WSE can be responsive to changes in local investment priorities or outcomes.
  • Governance: The governance structure of the proposed WSE is at odds with enabling local representation from the range of disparate communities across Entity C.  It is considered overly complex and unworkable across 22 local authorities and multiple Iwi/Māori. There appear to be too many layers and insufficient opportunity for local input, effective representation and ensuring accountability back to the communities it serves.  Further consideration is also required to effectively balance elected representation with a partnership approach with Mana Whenua.
  • Mana whenua: It is unclear how the proposed representative arrangements for Mana Whenua will work in practice across the range of interests and different scale and focus of iwi and hapū.
  • Consumers: We are concerned that there are not robust processes and opportunities for consumers or communities to raise issues with the WSE in relation to performance issues.
  • Financial impacts: There is a lack of clarity on the financial impacts of the reforms.  This has a significant bearing on the confidence our communities have in the reforms process, level of benefits and broader impacts on council from the reforms.
  • Assets: Water assets also provide a range of other functions and benefits for our communities and there remains a lack of clarity about what assets would be transferred as well as the timing, process and costs for this.
  • Rural water issues: significant further work is required to understand the impacts on rural water schemes, the price of water, their assets and capital structures including regulation and when and how water standards can be practically applied to local schemes.
  • Catchment planning: further clarity is required to understand how catchment planning practice will apply to the WSE and the future operating model.  This has a bearing on assets which may or may not be included as part of the transfer process.
  • Affordability and funding:we understand the need for significant additional investment into three waters in the future.  What alternative funding or borrowing models has the Government considered (and discounted) or is willing to enable for local government should the reforms not proceed or for councils that choose to opt out of the reforms process?
  • Investment planning:The process and opportunities for input into the future investment planning and prioritisation of local problems appears unclear.  To what degree can this risk be mitigated in a reforms model through the adoption of existing council LTPs?
  • Local government reforms: The cumulative impacts and alignment across three waters reforms, Resource Management Act (RMA) reforms and future of local government impact on our ability to plan for the future.  This includes the future viability and role of local government, particularly for smaller councils.
  • Entity makeup: The impact on the reforms and the economies of scale if some Councils do not join the reform programme need to be clarified.   Further transparency regarding the entity alternatives considered in this process need to be included in the public consultation process. These alternatives include options to fund the 3 waters in other ways.
  • Economic regulator: More clarity is needed on the role of the economic regulator and how it will operate.

The following changes to the Government’s proposal/process are also recommended.

  1. Inclusion of an ombudsman process to investigate and resolve disputes.
  2. Confirm and obtain Council agreement on the principles and Council role in preparing the transition objectives, policies and processes.
  3. Confirm the principle that any shortfall or equity that arises during the transition is recognised and compensated.
  4. Provide for a Wairarapa representative in the Governance structure.
  5. Develop a process to gain an understanding of the community’s views once Council has further information from the Government on the next steps in the reform process.