Water reform: South could get more than $60m

Despite more than $60 million being on offer for three waters reforms in Otago and Southland, do not expect councils to "write blank cheques" at this stage.

Yesterday, the Government outlined how the $761 million funding it announced last month would be doled out regionally.

There is a share of $41.2 million on offer for Otago councils if they sign a memorandum of understanding (MoU) and enter an agreement that specifies what the money can be spent on and conditions attached to the funding.

Dunedin Mayor Aaron Hawkins said the Dunedin City Councils’ share of the money — $7.92 million directly, plus the council’s share of the wider $20.6million regional allocation — was being made available on a "no regrets" basis, "meaning we’re not being asked to commit to any longer-term decisions around our water assets at this point".

But he would not say categorically yesterday if Dunedin was going to sign up for the Government three waters stimulus and reform funding.

"I’m not going to write blank cheques at this point, we’ll wait and see what the MoU says. Ultimately it’ll be up to the council to decide whether or not to sign it, and enter into the funding agreement, at the August 25 council meeting."

Southland Mayor Gary Tong said at first glance was he was "more than happy" with the funding formula that took geography into account, as well as population.

His council received the largest share of direct funding in the Southland region.

"There’s still a lot of work to do yet," Mr Tong said.

"There’s a lot of discussions to be had yet — it’s not all about the funding.

"It’s about what’s in the MoU and it’s ... about what does their funding agreement mean."

Central Otago Mayor Tim Cadogan said he was "looking forward to discussions with councillors this month on the best way forward for Central Otago".

Central Otago District Council chief executive Sanchia Jacobs said the proposed reforms had been on the radar for some time; infrastructure services executive manager Julie Muir was working with neighbouring councils to investigate what a collaborative approach to the delivery of drinking, waste and stormwater services could look like.

Mr Hawkins said "the big question at the moment" was how councils could come to an equitable outcome with the balance of the regional funding.

Local Government Minister Nanaia Mahuta said councils had until August 31 to opt in to the programme by signing an MoU with the Crown; from then the councils in each region had until September 30 to decide how to distribute the regional funds.

A notional funding formula was also announced yesterday: a council’s population base, as a representation of the number of water connections the council serviced, would account for 75% of its funding.

The land area the council covered, to account for the higher costs per connection in areas with low population density, would receive a 25% weighting in the formula.

Each Government funding package included a direct allocation to territorial authorities (50%) and a regional one (50%).

After councils entered the MoU they must then enter an agreement that specifies what the money could be spent on and conditions attached to the funding — they would then create delivery plans specifying the projects they would use the money for.

The Government promised three waters reform after hearings about the 2016 Havelock North campylobacter outbreak in which 5000 people fell ill and up to four died, Ms Mahuta said.

Yesterday’s funding was also a key component in the Government infrastructure investment as a stimulus response to the Covid-19 economic slowdown.

Mr Hawkins said the Dunedin City Council expected further details on the allocation of the funding in the coming days.

The money would be used to accelerate work in its current long-term plan, both to renew ageing three waters infrastructure and in asset management planning.

When the initial funding announcement was made last month, Mr Hawkins said an "absolute bottom line" for the reforms must be that the assets remain in public ownership.

"The Government have been very clear — whatever the outcome, we’ll end up with water assets that stay in public ownership," he said yesterday.

"We’re very keen to see how they will ensure that happens, regardless of any future Government’s priorities."

hamish.maclean@odt.co.nz

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