It outlines how many shares each Council holds, how many people will be on the board and what how much representation is required from mana whenua, and transitional arrangements - when will the new company commence trading, when will assets and liabilities be transferred, when will it start charging from, how will it charge (status quo, by volume, or some other method).

These are plans required under the Local Government (Water Services Preliminary Arrangements) Act 2024, which provides an assessment of each Council’s water infrastructure (water treatment plants, reservoirs, pipes etc etc), how much they need to invest, and how they plan to finance and deliver the work through their preferred water service delivery model. The Government wants to see that plans are sustainable and support growth, while meeting regulatory standards for water.

The Secretary for Local Government at the Department of Internal Affairs (DIA), which as of writing is Paul James. It’s the responsibility of the Secretary to check that the plans submitted are viable, and if he has any issues with them, he can send them back for more work to be done. Councils need to submit with evidence.

There are three basic areas for consideration:

• revenue sufficiency (is there enough to cover costs)
• investment sufficiency (is it enough investment to meet regulatory requirements)
• financing sufficiency (are funding and financing arrangements enough to meet the investment requirements)

DIA will be assessing the plans over September and October against the legislative requirements. Then from November, DIA will start letting Councils know if the plans have been accepted or not. If the plans aren’t accepted, then Councils will have to amend or resubmit, and it may even lead to Ministerial assistance or intervention. If the plans are accepted, then the Council must publish it on its website as soon as possible.

A Transitional Governance Group (TGG) is being set up. It will have an independent chair, and the mayor and a councillor from each of the three Council partners. It held its first meeting on 16 September.

They can be amended within 24 months of the Local Government (Water Services Preliminary Arrangements) Act 2024 coming into effect. It was enacted on 2 September 2024.

For changes to happen, Council needs to identify the need for change and ensure any change considered fits within the water services legislation. The changes must be as a result of changes in local conditions, community needs or the operational environment.

The proposed changes need to be submitted to DIA for review and approval granted from the Secretary for Local Government. However, these changes shouldn’t be done lightly, and if the Minister believes the Council is not able to do its work properly, the Minister has the power to intervene.

There are a number of reasons why it’s better for us to be part of a Regional organisation. The main one is that it costs us less than any other option. We have better buying power for the pipes and other stuff we need to buy.

A larger organisation is also able to attract expert knowledge, while small organisations have to have people that have basic knowledge of a lot of things. While that’s not bad, we have a lot of complex work that needs to be done, which requires expertise so it is done well for now and in the future.

Finally, the Government has also been writing to most of the Councils that want to go alone and telling them they need to consider this very carefully. It probably won’t be viable. The Minister of Local Government Simon Watts has said he will put Ministerial Advisors into Councils to make it happen.

We still have control. It’s just in a different format.

We borrow money because the work we are doing is very expensive, and the district can’t afford to do it without borrowing. But we are smart with how we borrow, and we pay it back over the lifetime of the asset, so everyone who is benefitting from it is paying for it. We’re not just lumping the costs on people today for what will still be around and used in 30, 40 or 50 years from now.

We borrow from the Local Government Funding Agency which allows us to borrow at a low interest rate. That’s another great thing about being in a Regional water organisation – we can access an even LOWER interest rate.