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Mayor's column: Three Waters reform sparks optimism

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Mayor Tim Cadogan - Opinion

10 August 2024, 5:45 PM

Mayor's column: Three Waters reform sparks optimismCentral Otago Mayor Tim Cadogan. PHOTO: File

You may recall during the discussions on the rates rises that our Three Waters infrastructure was a big part of the problem and will be well into the future. 


Well, this week we got a look at what the future may look like from the Government, and while there is a hell of a lot to take in, at the moment, I am cautiously optimistic with what I see.

 


Now, I know there will be some reading this who will be saying to themselves “hang on a minute, wasn’t he all on board with Labour’s plan?” and the answer is yes and no. 


There were bits of Labour's plan that I was very much on board with and bits that I thought were not so good. 


The fundamental I was really on board with was that there needed to be an alternative to the way councils around the country are doing things now in the Three Waters space, and my view hasn’t changed just because the Beehive has gone from red to blue. 


There are bits of National’s plan I am very much on board with too, and bits I think are not so good, but it is giving us several ways forward that are all better in my view than where we are now.


 

So, what’s to like? Firstly, the Local Government Funding agency will be allowed and supported to extend the amount it can lend to the groups that may run the Three Waters infrastructures into the future. 


I would prefer that we don’t take on more debt, but we are going to have to (when I say “we”, I am referring to both CODC and virtually every other council (bar regional) in the country) to do what needs to be done. 


While we don’t want more debt than we must have, we also shouldn’t be afraid of debt, because debt spreads the pain of paying for long-term infrastructure over years, meaning the people that are using it are in essence paying as they go. 


Prior to this announcement, CODC was looking at hitting its then debt ceiling in 2028-29. 



If that happened, infrastructure that needed to be built would still need to be built, but with no more debt available to pay for it, today would have to pay, through its rates, for tomorrow. 


While we haven’t crunched the numbers yet, considering other changes made, I have genuine hope that we may now not be facing that financial spectre.

 

I’m also pretty excited about the new structure on offer. There are five, being:

 

1. Council owned (like now)

2. One council CCO (Council Controlled Organisation)

3. Multi-council CCO

4. Mixed Council/consumer trust ownership

5. Consumer trust owned

 

I am particularly interested, at this early stage, in numbers 4 and 5 which are new on the scene. 


From what I have read, a consumer trust model (whether mixed or not) would involve a separate election for members of the trust board that would look after Three Waters infrastructure. I can see benefit in that. 



If the public had, at election time, one list of candidates for council and another list for a trust to run Three Waters, I think we would see people who are specialist in infrastructure governance gravitate to the latter. 


Three Waters governance is a multi-tens of million dollar undertaking with high levels of knowledge and skill required. 


Central Otago has a great council with people on it who have developed those skills, but we have all (including me) learnt them on the job, not the ideal scenario given the responsibility involved.

 

I am also particularly interested in news that the Government will be instructing Taumata Arowai to create a standard for wastewater discharge for the whole country, taking regional variances out of the equation. 



This is, in my view, a very good step forward, depending on what that standard is of course. 


My understanding is that the standard will be a high one, but not so high that discharge to appropriate waterways will be banned. 


Given the cost of moving the Alexandra/Clyde plant to land disposal is in the vicinity of $110m, you may understand why I feel this way. 


I would much prefer that we don’t discharge treated wastewater to waterways, but the cost to council, and to the whole country of not doing so is extraordinary.

 

So, as I say, early days, but overall, I am feeling pretty positive about what we can achieve with these changes.