A report is being prepared for city councillors' consideration requesting their approval to go to a referendum (probably in April) to transfer the ownership of the Rocklands Rural Water Scheme from the council to an entity representing the scheme's members.
A group of farmers in the Rocklands area, south of Middlemarch, built the scheme, which supplies drinking water to livestock, homes and shearers' quarters, in conjunction with the then Silverpeaks county council and some central government funding in 1984, and has maintained the pipelines since.
The Dunedin City Council took ownership of the scheme in 1989 when the councils were amalgamated, and has since maintained the small, low-tech treatment plant in the scheme, and provided administrative and financial management support.
The scheme is the smallest of the city's water schemes, supplying 12 farms and 55 people, but the largest by land area, with 78km of reticulation.
Users have been seeking changes to governance and ownership of the scheme since 2005.
In late 2011, councillors asked staff to consult affected people about what they wanted to do.
Council water production manager Gerard McCombie said consultation was now complete and, as a result, the report would request approval for a referendum on transfer of ownership.
The sale price would be $1, and include the scheme's small, low-tech water treatment plant, as well as pipelines, tanks, valves, and other equipment - together worth $2.1 million.
Project manager Sarah Stewart said users of the scheme and those who owned the land which was supplied by the scheme would be eligible to vote.
The proposed sale would proceed if 50% of them supported the move, with the transfer taking place mid-year.
The $1 price tag was a nominal sum required for legal reasons, and took into account the fact the users had already paid to build the scheme themselves and maintained the pipe network since, Mrs Stewart said.
Mr McCombie said if ownership was transferred to the Rocklands group, members would be trained to maintain the treatment plant and be responsible for meeting legislative requirements for drinking water quality.
That could be achieved by installing filtration devices under their benches, while leaving stock water below the required quality.
The council's only interest in the scheme would be in sending a monthly bill to the owner entity for a metered take of untreated water from the Deep Creek pipeline.
The transfer of the ownership would reduce overhead and maintenance costs for the council and avoid the potential of a major capital upgrade to comply with the New Zealand drinking water standards.
Within the city's boundaries there are two other privately run water schemes supplied from the city's bulk water supply system - Hawkesbury Village, supplied from the Waikouaiti system, and the Hindon rural water scheme, supplied from the Deep Creek pipeline.
