Water: Sense and Sensibility

I write on 3 Water Reform - again unpublished by NZ Herald - as a former Auckland Councillor and Regional Councillor now Mangawhai resident. This post focuses on the idea of co-governance....

After decades of immersion in Auckland’s centralised and old-school water, wastewater and stormwater solutions, I have found Mangawhai’s evolving approach liberating, receptive to new ideas, and locally responsive – characteristics that will be blocked by the Government’s blunt and brutal Three Water reforms.

Auckland’s Watercare is tipped to head one of the four proposed Three Water entities. Inevitably Watercare’s existing culture of centralised engineering, massive electrical energy consumption, and inefficient water use will shape that entity’s priorities – and conflict with the diversity of locally appropriate solutions that have and are emerging.

For example all Mangawhai buildings collect and store rainwater for use, reducing stormwater flows, and while there is a centralised wastewater system for denser urban areas, all of its highly treated wastewater is used to irrigate farm pastures and Council is expanding it to irrigate the golf course, while other decentralised urban conurbations have their own high-tech wastewater systems.

None of these outcomes are behind Three Water reforms which appear to focus on co-governance, central control, and infrastructure investment – all of which can and are being delivered locally already. I accept there are challenges and constraints, but there are other regulatory and funding support options at Government’s disposal to improve those outcomes, and which won’t throw the baby of local innovation out with the bathwater.

The amalgamation of Auckland local government in 2010, merged the different three water management cultures of Waitakere, Manukau, North Shore and Auckland into Watercare, and blocked emerging progressive approaches and local efficiencies. For example comparative bench-marking enabled transparent comparison of how each of these four providers charged for water, maintained water networks against leakage, and rewarded efficient and reduced water consumption at household level. Waitakere City Council led the way rolling out water efficiency measures. North Shore operated its own wastewater system enabling wastewater quality comparison across the region.

When all three water functions are merged under one umbrella the opportunity and drive for innovation and efficiency is lost. Auckland amalgamation and countless overseas water mergers demonstrate that operating costs balloon as large single entities develop systems and tiers of management to address the disparate needs and aspirations of diverse developments.

The Three Water proposals come at a critical time in New Zealand’s development as populations migrate from dense city living to smaller communities in Northland, Central Otago and Hawkes Bay for example, and where the appetite for local control, sustainable approaches and de-centralisation are part of the attraction and character.

The murkiness of the co-governance part of Three Waters is evident in the visibility and consistency of local maori opposition – particularly here in Northland. When water resources are managed locally maori views and interests are incorporated. Local Council structures already provide for co-governance. Three Water reforms threaten the diversity of maori representation, and rock the boat of existing local arrangements which aim to strike a balance and recognise not all maori think the same about local water.

For example, resource consents to take Waikato water for Auckland town supply, were initially resisted by Tainui which expressed strong cultural views against the mixing of waters. But this opposition melted away - at the eleventh hour – when Watercare offered Tainui a piece of historically important land on the banks of the Waikato.

The Three Water reforms are inconsistent with the sort of local governance and management that is required by New Zealand communities and all New Zealanders today.   

Hidden Cost of Three Water Reform

After 12 years Auckland Councillor; Watercare Shareholder Representative; Three Water specialist; and Mangawhai Ratepayer Representative, and other stuff - I wrote an OpEd for NZ Herald on 3 Waters.....

Here's the draft OpEd which wasn't published:

Government’s Three Water proposals risk costing the country more in the long run, hide from the public the true cost of traditional engineered systems, resist innovation which benefits ecosystems, and perpetuate century old flush and forget wastewater management.

For most of my last thirty years in New Zealand I have immersed myself in the economics, governance and politics of its sewage, stormwater and water supply issues, and I cannot understand or accept Government proposals to centralise our whole country’s dispersed and different three water systems into entities modelled on Auckland’s Watercare and hoping for the best.

Watercare was mainly formed from amalgamating the assets of Auckland’s four city councils, thus removing the comparative bench-marking which enabled ratepayers to compare the relative water and wastewater costs and benefits of the region’s service providers - thereby encouraging efficiencies, and instead creating a relatively unregulated entity with dozens of managers each earning salaries of hundreds of thousands of public dollars. Watercare’s focus on discharging treated wastewater to the Manukau Harbour and Rangitoto Channel has led to the development of an extremely expensive sewage collection network which leaks in freshwater when it rains (necessitating bigger pipes with a billion dollar price tag), which routinely overflow raw sewage when it rains anyway, and  whose demand for pumps and electricity makes Watercare Auckland’s biggest electricity user.  

Watercare is not a paragon of virtue or exemplar upon which to base New Zealand’s future. Barely a drop of Auckland’s treated wastewater gets returned to land, despite the environmental benefits and savings when there’s a drought, and despite international best practice. When Watercare sought consent to draw Waikato River water for town supply, it was only concerted court action that forced Watercare to treat the Cryptosporidium microbes and agricultural organochlorines that raw contained. And local Tainui cultural concerns that Waikato water should not be mixed with Auckland catchments was dealt with by the “gift” from Watercare to Tainui of a piece of prime land on the banks of the Waikato where a significant battle had been fought.

New Zealand’s governance experience with Watercare is much the same as is experienced with very large public water infrastructure entities the world over. They become laws unto themselves, their internal processes largely invisible, impervious to public opinion, and stuck in the past. This is unlike New Zealand’s smaller community-focussed three water entities whose performance is very much on display, where costs and processes are much more transparent, and which depend on the advice of New Zealand’s nimble, innovative and competitive engineering consultancies such as AECOM, BECA, WSP and Tonkin & Taylor.

These smaller local providers are all on the same learning curve and mistakes are made. Mangawhai’s Ecocare system – an innovative pocket treatment plant designed to replace leaky septic tanks and discharge highly treated wastewater to farmland – is an example. The urbanisation of developing parts of New Zealand does require local communities to incorporate appropriate three water systems into their planning and budgeting, but big doesn’t mean better.

Recent discussion about the costs of computerisation of the proposed four new three-water entities is just the tip of the iceberg of the eye-watering transition costs that can be expected – just look at Watercare setup costs, along with the wasted costs of investment in existing community systems. But the greatest concern is the loss of innovation opportunity that centralisation of three water services will bring, concretely exemplified in Watercare, at a time when advances in membrane technologies, local reuse and collection systems, along with climate change, point in the direction of community level governance, operation and ownership. 

Why is Central Government Reducing Local Government and Democracy?

 This is an OpEd piece sent to NZ Herald a couple of weeks ago. Unpublished. So here it is:

While it is concerning that all of Auckland’s and Northland’s mayors are resigning ahead of  upcoming Council elections, it is not particularly surprising given the unprecedented and unrelenting attacks that have been aimed at Local Government by the present Central Government and which threaten local democracy and community planning in particular.

Kaipara District Council’s Mayor Jason Smith has given the Three Water Reform which forces all Councils to divest public water assets to entities established by new legislation as his main reason for resignation.

That reform is the latest in a salvo of change striking at the very heart of what local governments in Western countries around the world are for, with New Zealand already near the bottom list for functions and responsibilities delegated to local government, lagging significantly behind Japan, Switzerland, Australia and the USA for example.

The previous National Government was the foundry for much of Central Government’s appetite and ammunition for local government reform. The Hon Nick Smith, past Minister of Local Government and Environment, championed the argument that Local Government development planning and infrastructure construction activities were the principle cause of the steep rise in house prices, and that reform was needed.

He argued that Councils were slow to release land for development, making it scarce and thus forcing up land prices needlessly, and inept at building necessary supporting infrastructure such as roading and water and wastewater networks, thereby driving up the development contributions fees payable on each new lot.

The reforms he led included several Resource Management Act changes requiring large councils to review District Plan documents and make property development less restrictive and quicker.

For the past few years Auckland Council has routinely published data showing that despite its new Unitary Plan releasing huge tracts of land for development, and the consequent yearly construction of thousands more homes than have ever been built before, house prices have persistently shown strong upward growth well before COVID supply line restrictions on construction materials.

The present Government has adopted this argument wholeheartedly, and it continues to underpin its plan of attack on Local Government, despite growing recognition and acceptance of the counter argument that the main driver for house price increases since the Global Finance Crisis is the combination of near zero interest rates, cheap loans and mortgages, poor returns on traditional term deposit savings unlocking that money and further increasing demand for housing investment assets, and few meaningful taxes on capital gains. 

In the last two years economists and policy advisers in Australia have accepted this counter argument, and, interestingly, recent and anticipated reserve bank base rate increases here in New Zealand are cited by economists as the main cause of reductions in house price increases now.  

But still Central Government’s local government reform machine grinds on with consequences for local democracy and communities.

Decades of careful community planning have gone into the District Plans that shape the way towns and urban areas develop, change and grow.  These have been tossed aside by Central Government’s Resource Management Housing Enabling Act which permits three homes, three stories high to be built on most urban lots without need for resource consent.

While this reform should produce more homes, some of which might be “affordable”, the impact of additional housing on infrastructure has been ignored. There will be more pressure on water and transport infrastructure which will require upgrading. This needs to be planned and budget provided. Increased density means more people using community facilities such as halls, libraries, schools, sports facilities, parks and reserves. These community concerns are built into local government plans, and are why local government exists, but they are ignored by Central Government’s edict.

While there is room for improvement in local government three water infrastructure provision, there are many informed reasons not to proceed with the current Three Water Reform proposals which very much risk throwing the baby out with the bathwater.

Key among these are international trends away from centralisation of wastewater systems to de-centralised systems where wastewater is treated as close as possible to its source of generation. Considering the three basic components of a wastewater management system - collection, treatment and disposal – collection infrastructure costs account for about 60% of the total budget for a centralised system. Whereas in decentralised or more local systems, this component is reduced and focused mainly on wastewater treatment and disposal.

Local Government is ideally placed to be incentivised to work with its local communities, invest in new technologies, work hand-in-hand with local iwi, and build and operate efficient and sustainable three water systems that fit the local environment. 

Central Government needs to work in partnership with strong and motivated Local Government attracting the best staff and local representation to get the best outcomes, and deliver democracy.