Northland's biggest water services changes kick off in Whangārei
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LDR / SUPPLIED
Whangārei could end up subsidising Kaipara and Far North water users in a move described as historic for Northland.
Whangārei District Council voted on July 24 to set up a Northland-wide council controlled organisation (CCO) as part of the Government's Local Water Done Well change requirements.
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The decision was a major milestone starting the ball rolling on massive changes to how drinking water and wastewater services are structured and delivered in the region.
Council-owned assets - and debt- which provide drinking water and wastewater to about 100,000 WDC, Kaipara District Council (KDC) and Far North District Council (FNDC) consumers would be shifted into the CCO starting from July 2027.
WDC councillors voted unanimously for the proposed regional CCO - based on major work by the three councils in recent weeks.
That's in spite of the council being in a relatively strong water services position, in contrast to Kaipara and the Far North.
A memorandum of understanding created by the three councils must still get the formal okay from KDC which will vote on it at its meeting in Mangawhai on Wednesday, and FNDC at its council meeting the following day.
Whangārei Mayor and Northland water services working group chair Vince Cocurullo said the move toward a regional CCO for drinking water and wastewater was historic.
"This is huge," Cocurullo said.
He said initial principles were proposed for the regional CCO, including ring-fencing each council's drinking and wastewater financials .
There would initially be no cross-subsidisation of water charges across the three council areas.
The CCO would review those two things within three years from start-up.
The mahi that led up to Friday's decision involved the three district councils working closely together.
The inter-council working group of local politicians has met several times over the last month.
Crown-appointed advisor David Hawkins was also part of the group.
Hawkins, a former Papakura Mayor, was involved in putting Auckland's Watercare together.
The group looked at what was best for Northland, rather than solely a district-by-district basis.
WDC councillor and working group member Ken Couper said the regional proposal was a "cool mix" and "the elegant solution".
Northland councils must submit a regional water services delivery plan to the government by September 3 under its Local Water Done Well goals.
The plan would include seeking Government funding for critical Northland water services projects.
But yesterday's decision allows for FNDC not to play ball in the region-wide CCO.
The resulting scenario would then be a two-council - WDC and KDC - CCO.
WDC council meeting agenda papers said this alternate two-council plan would help address Kaipara's water delivery challenges without adversely impacting Whangārei.
The papers said under Local Water Done Well, WDC could continue to deliver water services through an in-house business unit.
There were greater challenges for Kaipara particularly around growth, and in the Far North around compliance, delivery and affordability.
The papers said a regional CCO was the most effective way of delivering safe, affordable and sustainable waters services for Northland.
It balanced regional collaboration with local accountability and provided a platform for long-term resilience and improvement.
Whangārei's cash reserves provided "early funding flexibility". The spike in capital spending would initially be driven by FNDC.
KDC would follow and WDC after that.
Cocurullo said the regional CCO proposal provided councils with off-ramps.
He said the CCO acknowledged that Whangarei's water services position was stronger than that of the KDC and FNDC.
WDC Infrastructure chair Cr Simon Reid said the move was a crucial step forward for the North.
"Potable water and wastewater are the two most critical areas we need to focus on," Reid said.
The new regional CCO proposal would allow for more borrowing than councils are able to do.
It could borrow up to a 500 percent debt ceiling, contrasting with individual councils' 280 percent.
Outside of Whangārei, Northland's water services delivery challenges include ageing infrastructure and compliance issues, particularly in the Far North, the need for significant investment to support population growth and renewing existing infrastructure and the high cost of capital spending needed in smaller communities.
The new proposal would see a shareholder council set up with two representatives from each council with at least one of those being an elected councillor.
Stormwater provision will stay with individual councils and not be part of the regional CCO under the proposal
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LDR is local body journalism co-funded by RNZ and NZ On Air.
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