Waitaki councillor Rebecca Ryan, now deputy mayor, told fellow councillors that she had felt "physically ill" in the run-up to a crucial vote about whether to shift water services into a new, multi-council water organisation.
The Department of Internal Affairs (DIA) had warned that joining Southern Water - owned jointly by Gore, Central Otago and Clutha councils - was probably the only option to meet "financial sustainability requirements" under water reforms.
However, the plan was given a thumbs-down by three out of four people responding to a consultation. Many were worried about losing control, a central theme of a noisy anti-Southern Water campaign run by one local.
The council slammed the campaign as "misinformation", but in the end it was only then-mayor Gary Kircher and one other councillor who voted to join Southern Water.
Ms Ryan and all the other councillors backed going it alone.
The vote had a predictable outcome: the plan to run things in-house was rejected by the DIA. The council is required to assess its water assets and develop a new plan with help from Crown Facilitator Amy Adams, including paying her $1654 per day, by June.
Meanwhile, Southern Water’s plan, and many other councils’ plans - including Dunedin’s - have been accepted.
The DIA has encouraged Waitaki to consider partnership working, again, and Mr Kircher remains adamant about the benefits.
"The belief there aren’t efficiencies doesn’t hold water."
The backdrop to this water drama is New Zealand’s drawn-out and stilted water reforms, trying to tackle creaking water infrastructure.
Across New Zealand, there has been deferred investment exacerbated by population growth, water pollution, climate change and consequential extreme weather events putting pressure on old pipes and treatment plants.
The crisis has already caused one disaster: Havelock North’s water contamination in 2016 led to an inquiry that blamed councils and stressed people’s right to clean water.
Nearly a decade on, former chief executive of Oamaru Hospital Keith Marshall puts things bleakly and urgently for the sake of public health: Waitaki’s situation is a symptom of reforms in "chaos" and, regarding water investment, it is simply time to "get on with it".
The water reforms started life as a jigsaw puzzle suitable for a 3-year-old, but would now confound any adult.
Four entities, the South Island mostly in one, were proposed under Labour’s Three Waters banner. After consultation and a change-up to 10 entities, there was a change in government and new mantra: Local Water Done Well.
New legislation required councils to submit water plans, either in-house or through new entities called Council-Controlled Organisations (CCOs), established by one council or several.
A hodge-podge of delivery arrangements has emerged.
Councils setting up a CCO say it shifts water costs off their books, liberating debt ceilings for other costs, and those in joint CCOs argue increased scale helps bargaining power and staff retention.
Plans by 11 joint CCOs, created by 38 councils, are largely approved with the remainder pending. Five more CCOs have been set up by single councils with plans approved, including Queenstown Lakes CCO and Timaru CCO.
However, a report last month by analyst S&P Global Ratings warned that shifting water off council balance sheets on to a CCO would not alleviate councils’ credit risk; and New Zealand’s remaining 24 councils have opted to deliver water in-house still, with Waitaki’s plan the only one rejected so far.
Dunedin, Invercargill and Southland in-house plans have been approved.
All told, 67 territorial authorities will have water managed by 40-odd entities, 10 times more than originally planned.
For comparison, England - not without its own water problems - has 10 water companies, for 10 times as many people, but an even bigger difference is that its water delivery is privatised.
Under New Zealand’s Local Government (Waters Services) Act 2025, shareholders of water CCOs must be councils.
Mr Kircher says privatisation risk was "definitely a concern for a lot of people" prior to his council’s vote against Southern Water, but new Waitaki Mayor Melanie Tavendale says the conversation "has now probably shifted" towards the affordability concerns.
Former Oamaru Hospital chief executive Keith Marshall says the big concern is "legion" health issues, now handled by "random" entities.
"Water is a great example of local government not doing its job ... and now there will be 40 entities still. The reforms were mishandled last time and the current reforms are even more of a fiasco.
"The government does not have a coherent view of water management and has let it fall into the hands of chaos. If you are going to do amalgamations you have to do it on a much bigger scale than currently proposed."
He queries the decision-making process behind DIA’s rapid approval of differing water plans, but also argues that all plans, including Waitaki’s, should now be signed off and investment start.
"Let’s go back to basics. This is about clean, safe drinking water for everyone. Let’s get on with it. If this council hasn’t done the work it needed to do in the past then we have to bear the cost of it."
Waitaki's rejected in-house water plan had forecast $262million capital expenditure over 10 years, including $15m this year rising to $47m in 2033-34; and quadrupling water borrowing, from $56m in 2025 to $201m in 2034.
The plan had listed problems.
Only three of 15 council water supplies were compliant with drinking water quality rules at the end of quarter two, 2024-25.
Six had permanent boil-water notices. Four more had been upgraded, but were non-compliant, due to not meeting ultraviolet light treatment requirements or having no filtration to address "source water quality variations". The Waihemo water supply had been under "conserve water" notices, during "poor raw water quality" or in summer. The Oamaru water treatment plant had technical problems.
Up to half of water was lost through leaking pipes and Oamaru’s cast-iron water mains were at the end of "theoretical useful life".
The district’s wastewater pipe network was suffering "general deterioration" with some wastewater trunk mains in Oamaru in poor condition and needing to be upgraded to "cater for capacity during wet weather". There had been ongoing non-compliances at Oamaru and Palmerston wastewater treatment plants, resulting in abatement notices at both and infringement notices for Palmerston. Upgrades were probably needed at many wastewater facilities.
An internal DIA briefing says that the government had sought further information on Waitaki’s asset condition "multiple times" during the assessment of its in-house plan and this was not provided by Waitaki. The Water Services Authority also had "serious concerns" about the drinking water standard breaches, the briefing said.
A DIA spokesperson said the decision to require an asset review, and a revised plan with compliance solutions, was "important for the wellbeing of Waitaki’s population".
In a press release following the decision to turn down in-house plan, Waitaki council said the asset review would cost millions, but Ms Tavendale now says it will likely cost around $250,000 and is positive about working with Ms Adams.
"We all want to step forward."
Mr Kircher had also felt he was stepping forward when proposing joining Southern Water.
Consultancy firm Morrison Low had evaluated options and a joint CCO carried "significant benefits".
Waitaki ran two public consultations, a communication campaign and drop-in sessions.
Mr Kircher says he had tried to get councillors to understand that keeping water in-house would mean loss of control because of lack of funds for other things; the council had not even been accounting for water asset depreciation.
"Fundamentally, choice is gone."
However, local Mike Sweeney led an anti-CCO campaign, circulating a seven-page document "They want to give away our water". It called the consultations "intense propaganda" and argued Southern Water would lump together problem councils and not deliver savings.
Council chief executive Alex Parmley called Mr Sweeney’s document "misinformation" and published an annotated version, countering points.
In the end, only around 1% of the population responded to the second consultation, with most objecting to Southern Water, and councillors then voted against joining it.
Councils elsewhere took a different tack.
In Clutha, a similar consultation attracted a similar low number of respondents with most saying they did not want to join Southern Water, but then-mayor Bryan Cadogan said joining up was the best option, and 10 out of 14 councillors voted for the change.
University of Otago sustainable communities researcher Prof Janet Stephenson has sympathy with councils trying to engage people on complex topics.
"The greater the repercussions, the more significant the effort needs to be - requiring both time and money."
Me Sweeney declined to comment to the Otago Daily Times, but former Waitaki councillor Tim Blackler said he had "no regrets" about voting down Southern Water.
Housesholds would have been "no better off".
"Without a government prepared to enforce metros amalgamating with provinces to cross-subsidise, Local Water Done Well was never going to yield the gains provincial New Zealand needs to meet the requirements placed upon them except in very limited circumstances where it makes sense, spatially, to do so."
Partnership ideas had been grander prior to the Southern Water idea.
Selwyn council had investigated an 11-council CCO including Waitaki and a working group had then considered a Southland-Otago CCO of seven councils including Dunedin, Invercargill and Queenstown-Lakes and concluded there were benefits, particularly for the smaller councils.
After bigger southern councils went their own way, Southern Water was born from "what was left", as Gore Mayor Ben Bell put it.
Central Otago Mayor Tamah Alley says Southern Water has been a "smart play" for smaller councils and the entity remains "open" to other councils.
A Timaru council spokesperson said its CCO also provided "a vehicle for neighbouring councils to join" and it had been "disappointed" that Mackenzie and Waimate had not joined.
The DIA says that it received a letter in September from Waitaki and Timaru councils advising they were in "exploratory discussions".
The bunfight for partnerships sounds like anxious school children trying to form teams and not be left out; Mr Kircher said he had wanted to team with southern and northern partners.
"The goal was to hold hands with both sides."
Water New Zealand chief executive Gillian Blythe said there is "potential for further amalgamations" but investment promised in water plans "must commence" and two hard issues needed addressing together - eroding infrastructure and eroding freshwater health.
"Water New Zealand expects water service providers to engage with their communities, including mana whenua, about the health of waterways, and the importance of not further degrading the water environment."
Te Mana o te Wai, the Labour government’s water policy, had prioritised freshwater protection, then drinking water, then other uses; but now, a DIA water reform fact sheet bluntly says "requirements in water services legislation to give effect to the principle of Te Mana o te Wai have been repealed".
University of Otago water research fellow Marnie Prickett says Te Mana o te Wai and larger water delivery entities had lined up policy across natural and infrastructure systems and "meant no water orphans: small councils that cannot afford what they need".
"I don’t understand the small-mindedness of desperately hanging on to degrading assets. Are you going to have pipes rot in the ground so no-one else can have a say over them?"
When asked about the importance of land use and water delivery being considered together, noting the national link between the dairy industry’s growth and water pollution, Ms Tavendale said she would "steer clear of that conversation".
"I am mindful of bringing the community along with us and we have got a few things to work through on that."
