Three Waters repeal an added complication for councils' long-term plans

By Libby Kirkby-McLeod for RNZ

Every three years, councils across the country have to refresh their 10-year financial plans and ask the public for feedback. 2023 is meant to be one of those years.

But the demise of Three Waters, along with uncertainty about the future of water infrastructure, has thrown massive question marks over some councils' books and plans.

Wade through the Water Services Acts Repeal Bill and you will find a section titled 'transitional arrangements for local authorities' which allows for councils to extend the deadline, or defer for a year, their long-term plans (LTP) which would otherwise be due this July.

Minister of Local government Simeon Brown said these transitional arrangements gave councils flexibility.

"We ultimately knew we were making changes as they were starting their LTP process. We wanted to provide maximum flexibility, so we put that forward as part of the proposals and ultimately legislated it when we repealed the last government's failed Three Waters."

Waipa District Mayor Susan O'Regan said the provisions came out of nowhere, but were a lifeline for her council. She said long-term plan creation was a huge amount of work, much of that unseen in the 18 months to two years before it went out to the public for consultation.

"So when you are kind of told 'you're not to include water services' for the bulk of [that time], and then at the 11th hour chuck it back in, it means there's a significant amount of rework."

O'Regan said Waipa district council wanted to see the Local Water Done Well legislation before moving ahead with a 10-year plan. It was expected the Local Water Done Well legislation would be announced this year, and in place by mid-2025.

"Obviously we'll have an opportunity to see what the impact of those are, and to see what opportunities and options they create."

Waikato District Council had also decided to pause the release of its 10-year financial plans until next year. Chief executive Gavin Ion said instead, the council will consult on an enhanced annual plan for the upcoming financial year.

"In effect, because we've done so much work on our LTP, the enhanced annual plan will really be the first year we had intended for the LTP."

Ion said Waikato District Council was dealing with a range of issues, including that its water provider, Watercare, signalled it wished to withdraw from the district.

"Watercare's focus is Auckland predominantly, and with the water reform they had always seen there would come a time when the contract would need to cease."

This was fine when the council's drinking water, wastewater and stormwater services were expected to be wrapped up into 'Entity B' (which was originally going to cover the Waikato region). Unfortunately, the council is not clear now where its water assets and services might end up. Ion said they now have a year to work through what they will do, among much uncertainty.

South Waikato District Council said it was taking advantage of one of the other options in the Water Services Acts Repeal Bill that allowed for up to a three-month extension to the long-term plan statutory deadline.

"We anticipate at this stage that we will adopt a little later than normal which is 30 June; aiming currently for adoption mid- to late-July," a council spokesperson said. "Given the complexities with LTPs and a subsequent legislation change, councils have until 30 September to adopt their LTPs this time round."

Waikato Chamber of Commerce represented businesses in all these districts. Chief executive Don Good said Waipa and Waikato were doing what was smart and prudent for their districts. But, having said that, businesses valued certainty.

"We'll give them the time to do an enhanced annual plan, but we'd like to see them come back to the longer term plan which gives business a sounder footing on which to do their plans."

He said both central and local government set the environment in which businesses operated.

"And businesses need certainty if they are going to take some money out of the bank and invest it."

So far, Waipa, Waikato, Gore, Buller, Waitaki, and South Wairarapa have chosen to delay their long-term plan for a year. More councils may yet follow suit.