Councillors agreed to Central Otago District Council Three Waters director Julie Muir’s request to extend the council’s existing Three Waters operation and maintenance contract with Fulton Hogan for a further year at a council meeting last week.
However, funding requirements could lead to councils having to join together to borrow enough money to keep up with water delivery and maintenance now that Three Waters reform was off the table, Ms Muir said.
Further, a culture change might be required because "near enough is good enough" was no longer satisfactory for the provision of Three Waters.
The previous government’s plan to take water activities away from councils was set to be reversed but the cost of water infrastructure meant regional council-controlled organisations (CCOs) might be needed to access long-term borrowing for infrastructure, she said.
Three Waters for the council refers to drinking water, wastewater and stormwater.
CCOs are a company with a majority council shareholding, and can be made up of more than one council.
Council chief executive Peter Kelly has described CCOs as "complicated" and taking significant time to set up.
Ms Muir said even if a shared CCO with other councils was viable, the Fulton Hogan contract would likely still have to be re-tendered because of the time it would take to set up a CCO.
There had been several performance failures by Fulton Hogan in the past 18 months and that showed the council it needed to take more ownership rather than contracting it out.
Changes to legislation - including increased levels of monitoring to meet the legal requirements for drinking water quality and environmental impacts from wastewater — meant there was now more work required than the council had budgeted for.
Additionally, to minimise annual rates increases, the Three Waters operational budgets from 2022-24 had not provided for inflation, Ms Muir said.
There needed to be a complete culture change regarding water, she said.
"Within the water sector in New Zealand ... it has run on the smell of an oily rag."
Water was once managed by community boards and individual townships, so there were very few people to pay for the upgrades required.
"In a democratic environment where people get voted in and out on rates ... it hasn’t had the level of investment across the board that is needed and that’s bred a culture within the workforce that there’s not an expectation to meet compliance because a community couldn’t afford it - so ‘near enough is good enough’ with the money you have available to spend and that’s the kind of culture I’d say that now needs to shift."
Regulators were now "flexing their muscles", she said.
Cr Tracey Paterson Paterson asked if water was now in an enforcement environment whether there was a fear of enforcement.
Ms Muir said non-compliance with consents was not uncommon across the country but the message now was it was not OK and not having enough money was not a good enough reason.
