The results of a binding referendum will decide if the Dunedin City Council relinquishes ownership of a $2.1 million rural Otago water scheme for just $1.
Councillors at Monday's full council meeting agreed to proceed with a referendum later this year that will decide the future ownership of the Rocklands rural water scheme.
The scheme is owned by the council and used to supply drinking water mainly to livestock, as well as some homes and shearers' quarters, in the Rocklands area, south of Middlemarch.
However, its ownership status had been disputed by users, and a sale would also allow the council to avoid the cost of upgrading it to meet higher drinking water standards introduced in 2007.
Farmers in the Rocklands area built the scheme in 1984, in conjunction with the then Silverpeaks County Council and with some government funding, but the city council took ownership with amalgamation in 1989.
It was 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 had been seeking changes to governance and ownership arrangements since 2005, prompting a move by the council to consult affected people about changes in late 2011.
A report by council project manager Sarah Stewart to Monday's meeting said consultation was now complete, and scheme members had voted unanimously in favour of a transfer.
However, a binding referendum needed to show 50% or more of scheme members and landowners supplied by it were in favour of the transfer, before the change could be confirmed.
The scheme could then be transferred for $1 - a nominal sum required for legal reasons, which reflected the fact the users had already paid to build and maintain the scheme, she said in an earlier report.
The scheme had been operating under a boil-water notice since 2009, but, if transferred, individual homeowners could add filters to ensure water to their homes was suitable, Mrs Stewart's latest report said.
That would avoid the cost of an upgrade of the entire scheme to provide water largely consumed by sheep and cattle, she said.
The referendum was expected to run from mid-April to May 9, and, if results were in favour, the transfer would occur on June 30.
The council would also retain first right of refusal to buy the scheme back.
