Nelmac will be able to retain its water services after the Government backtracked on part of its planned Three Waters reforms.
Nelson City Council had been fighting for Nelmac to retain its water branch, after realising that under the proposed Three Waters changes the company would not be treated as a contractor under the transition, and instead all water services and assets in the council-owned company were expected to be transferred to the new water entity
A council report warned it could mean a loss in dividends for the council of about $800,000 – meaning an extra 1% rate increase could be needed in 2023-24 – and there could be a decrease in standards of Nelmac’s other services, such as maintaining parks, flood repairs and pest control.
At the time, Nelson Mayor Nick Smith called on the council to “thwart” the transition in a bid to protect the company.
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But, on Wednesday, Local Government Minister Kieran McAnulty reversed that decision, and said that only companies whose sole purpose was water services would be transferred to the new water entities.
Council-controlled organisations, like Nelmac, that had multiple roles would instead be treated as contractors, with the contracts transferring to the new entity.
The only companies that would transfer now were Watercare in Auckland and Wellington Water.
Excluding mixed-use CCOs was a “common sense approach”, McAnulty said.
LAURA SMITH/LOCAL DEMOCRACY REPORTING
Local Government Minister Kieran McAnulty says the water assets in council owned companies like Nelmac will no longer shift to new entities under planned water reforms.
“We want to avoid the unbundling of staff and equipment and their transfer to different water services entities across New Zealand when we don’t have to.
“We also don’t want them being detached from existing structures and systems. This would result in unacceptable risks to service continuity across the country.”
He thanks those involved for their “positive engagement” and “constructive input” in progressing the reforms.
“They need to happen in order to save ratepayers from unaffordable costs, but we also want to do it in a way that is straight forward with as little disruption as possible.”
On Wednesday, Smith said the decision was a “no-brainer”, which had led to months of uncertainty for staff and the business.
“It was unwise for then to even have proposed compulsory taking of these significant assets from the Nelmac business,” he said.
“I’m delighted the Government has backed down – it had major implications for Nelson.”