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Moved
Grant Smith, seconded Aleisha Rutherford.
RESOLVED
That Council:
1. Note
the Government’s 30 June and 15 July 2021 Three Waters Reform
announcements.
2. Note
officers’ preliminary advice on the accuracy of the information
provided to Council in June and July 2021 as a result of the RFI (Request for
Information) and WICS (Water Industry Commission for Scotland) modelling
processes.
3. Note
officers’ preliminary analysis of the impacts of the Government’s
proposed three water service delivery model on the Palmerston North City
community and its wellbeing, including the impacts on the delivery of water
services and water related outcomes, capability and capacity, on Palmerston
North City Council’s (Council) sustainability (including rating impact,
debt impact, and efficiency) and the conclusions that:
a. Without water reform, our current 10 Year Plan (LTP) is
unsustainable based on good practice financial rules. Costs to ratepayers
will significantly increase, with or without reform. With reform, there is
the opportunity to escalate investment, and data gathering on asset condition
and lifespan, which will both improve reliability of service.
b. DIA (Department of
Internal Affairs) Tranche 1 reform funding (received November 2020) of $9.34
million is currently allocated to 25 ‘live’ projects focussed on
improving the resilience of three waters infrastructure and is 53% spent to
date. Council has benefited from participation in the water reform process,
through direct funding and indirectly through involvement in scene setting.
c. The BPO (Nature
Calls), our largest project, is not affected by the entity boundaries
proposed. Timings are mandated by consent requirements, such that the consent
must be lodged in June 2022, ahead of the reform. The timing makes it
difficult for the new entity to be involved meaningfully during its
establishment phase.
d. Council has not
budgeted in its current LTP for additional costs of compliance with new
mandatory requirements from the Water Regulator, Taumata Arowai, which have
recently been consulted on. This adds to the unaffordability of investment
required to maintain assets and consent compliance.
e. The cost of transition
to any new entity for Council is not yet known, because the tasks and process
to transition are yet undefined. Several tasks have been identified to date,
which require significant resourcing at a time when resources are constrained
nationally. More due diligence work is needed to ensure that we are ‘no
worse off; there is potential for this analysis to be funded by diverting
some of our DIA tranche 1 funding.
f. The
Transition Unit has guaranteed jobs to those non-executive staff working in
water, for 18 months at their current location. The scope of the water
entities is not yet defined, so the impact on staff outside of those directly
involved in utility operation and maintenance is not yet understood. The new
entities, as they are established, are likely to take staff out of Councils,
who cannot be backfilled because of a nationwide shortage.
g. There needs to be more
clarity around how stormwater land use planning will function under water
reform – the skill sets of stormwater utility management are quite
different to those of land drainage as part of land development, and the
management of water sensitive design assets is closer to parks’
capability than water network capability.
h. There also needs
to be more clarity around how the new entity will work with councils to
prioritise growth and enable strategic plans to be realised.
4. Note further Council
specific information is yet to be received, or analysed, including detail on
the cost of stranded overheads, the impact on the operational workforce, the
resourcing and cost of the transition process, and other matters detailed in
the report.
5. Note that the
‘better off’ funding of $32,630,589 allocated to Council to spend
on civic and community improvement requires engagement with iwi on what to
spend the funds on, and confirm that consultation with the community will
also form part of Council decision-making for allocation of this
‘better off’ funding; and also note that the Government will lead
engagement with iwi/Maori over the reform programme.
6. Note the analysis of
three waters service delivery options available to Council at this time, in
section 6 of this report.
7. Note that a decision
to support the Government’s preferred three waters service delivery
option is not lawful (would be ultra vires) at present due to section 130 of the LGA (Local Government Act 2002), which
prohibits Council from divesting its ownership or interest in a water service
except to another local government organisation, noting
Government’s stated intention for new legislation in this regard.
8. Note that Council
cannot make a formal decision on a regional option for three waters service
delivery without doing a LTP amendment and ensuring it meets section 130 of
the LGA.
9. Note that community
consultation would be required under Council’s significance policy once
Council has further information on the range of options available to it and
their implications for both Council and its communities, and Council has
determined a preferred option for future three waters service delivery.
10. Request the Chief Executive
Officer to seek guidance on and/or give feedback to the Government on
the following areas of the Government’s proposal that Council needs
more information on:
a. the final boundaries
b. protections from
privatisation
c. plans for
consultation with mana whenua and communities
d. how community voice
will be heard within the new entities, and what influence local authorities
will have (and what the community can realistically expect the council to
influence particularly if it is not on the regional Representation Group)
e. representation from
and on behalf of mana whenua on the reform proposals to date
f. integration
with other local government reform processes
g. integration with
spatial and local planning processes and growth
h. prioritisation of
investment, and alignment with Council priorities
i. workforce and
capability planning for the new entities– there are not enough of the
right people now to deliver three waters and there is a need to retain our
people through the transition
j. what a
Government Bill will cover and whether the reform will be mandatory
k. conditions associated
with the Government’s package of funding for local government
l. transition
arrangements, including Council’s own workforce challenges (without transition
challenges on top) and due diligence for asset transfers etc.
m. the scope of the stormwater
role that the entities will play, both in relation to growth and development
planning, development control, and asset management and maintenance particularly
of green or water-sensitive assets
n. After reform, how the
entity intends to engage with local communities, and the role of Council in
advocacy, facilitation communication, response to failures (including demand
management comms and engagement)
o. How Councils will be
involved in holding future entities accountable for performance and customer
service levels
and suggests the following
changes to the Government’s proposal/process:
p. Suggest that the
DIA confirms that stormwater in the context of land use planning, development
and growth, remains with local authorities, and that the stormwater roles of
the new entities are more clearly defined as network provision and
maintenance to comply with regional plans. This includes working with
flood-protected floor levels and the like set by Councils.
q. Suggest that the
role of the new entities in relation to stormwater quality is more clearly
defined, to help councils understand which activities (such as raingarden
maintenance, pond de-silting, street sweeping) will move to the new entities
and which will stay.
r. Suggest
that the new entities consider the interface between roading and stormwater,
when confirming which activities will remain with Council, and which will
move to the new entity.
s. Suggest
the new water entities confirm that levels of service will be maintained or
improved across the region and locally ie that Council levels of service will
not fall under the new regime.
t. Suggest
the DIA works with officers on understanding Council overhead roles and
costs, including defining activities and costs that Council will have in
future relating to advocacy, consenting, bylaws, land use planning.
u. Suggest the new
water entities do not transfer any development contribution funds for assets
that have already been built but have residual asset benefit.
v. Suggest that
budgets are allocated urgently to commence work on systems transition.
11.
Requests that the Chief Executive report back further once she has
received further information and guidance from Government on what the next
steps look like and how these should be managed.
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