On Tuesday, the Waitaki District Council voted to join Entity I to the north, where it will share Three Waters decision-making with Canterbury and the West Coast.
The North Otago council, led by Mayor Gary Kircher, had been expected to form part of Entity J, comprising Otago and Southland.
Mr Cadogan said although Waitaki’s decision was disappointing, it was understandable.
"Gary is the chair of the Otago Mayoral Forum, and Waitaki is part of Otago.
"However, he’ll now be heading to Canterbury and, sadly, given the untenable circumstances we find ourselves in in Entity J, I can’t say I blame him. Gary and his council have made a decision for their ratepayers that will ultimately help them avoid a doubling of costs for Three Waters."
Projections from the Department of Internal Affairs show Entity J households paying an average $2090 extra a year — nearly double — under the 10-entity model.
"That’s the advantage of being linked to Christchurch and surrounds, in terms of the population and ratepayer density that provides to offset collective costs. It’s unfortunate, but I understand their decision."
Mr Cadogan said Waitaki’s move threw Otago and Southland’s situation into "stark relief".
"While every effort is being made by Otago and Southland to make the best of a challenging situation under the new, 10-entity model, it’s an unfortunate reality that if things remain as they are, it will cause extreme financial hardship for pensioners, young families and the most vulnerable in our society."
Mr Cadogan did not believe, in itself, Waitaki’s departure would significantly change the projected costs for Entity J.
However, projections from some southern councils suggested costs for ratepayers in some areas could be substantially higher, he said.
He remained disappointed in the Government’s decision to move from a four to a 10-entity model.
"The reasoning for changing to 10 entities was to give councils a greater voice. But that difference in influence is comparatively insignificant when you think of the ultimate costs to those paying.
"It’s time for Otago and Southland to seriously consider their position."
