Mayor's Message

The new Government’s policy on Council water infrastructure announced by Minister Simeon Brown last Friday gives Councils more choices.

This issue matters a great deal. Nelson City Council’s drinking water, wastewater and stormwater infrastructure is worth more than $800 million and is a third of Council’s total assets. They have been built and paid for by ratepayers over 150 years. Decisions on who owns them, who maintains them, what future investments are made and who pays affect us all.

The new policy gives Nelson City Council five options on how we structure the management of our drinking water, wastewater, and stormwater infrastructure. We can maintain them in house (as is), form a Council Controlled Organisation (CCO) alone, form a CCO with other Councils (like Port Nelson Ltd), form a Consumer Owned Trust (like Network Tasman) or have a hybrid Consumer Owned Trust-Council CCO.

This contrasts with the “Three Waters” policy of the previous Government that gave Councils no choice. The assets were to be taken off Councils and put into large water entities. Originally, Nelson was to be put into “Entity C” covering Wellington and the East Coast of the North Island. I vigorously opposed this. Nelson ratepayers should not be picking up the bill for the billions needed to fix the capital’s badly neglected water infrastructure. The merits of this opposition were reinforced last week with the damning report on Wellington Water and the resignation of its Chief Executive.

The new policy under the first three options has the advantage of providing access to lower-cost capital for water infrastructure through the Local Government Funding Agency. The water entities under “Three Waters” would have paid a higher interest rate. This matters because water services are capital intensive with relatively low operational costs.

Nelson is much better positioned on this water issue than almost every Council in the country because of sound previous investment decisions such as the Maitai Dam and Tantragee Water Treatment Plant. There has also been a consistent programme of renewals and upgrades. This is being maintained with infrastructure investment of $249 million on wastewater, $129 million on drinking water and $99 million for stormwater included in our Long Term Plan 2024-34, adopted unanimously on 27 June by the current Council.

The costs of water services will continue to rise but I am confident we now have options that will work better for Nelson ratepayers.