Councils ask court if they can get ‘full and fair’ compensation in water reforms


Three district councils ask the court whether they are entitled to full and fair compensation for their water infrastructure when it is transferred to public entities.

The issue is part of a larger case that the councils are pursuing, which ultimately seeks confirmation of their legal property rights over the water infrastructure, which they currently own and operate.

The case follows the government’s three-water reform, which will transfer drinking water, wastewater and rainwater infrastructure from municipalities to four regional public entities in mid-2024.

The District Councils of Timaru, Waimakariri and Whangārei, represented by Jack Hodder QC, filed a statement against Local Government Minister Nanaia Mahuta in Wellington High Court on Friday.

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Timaru Mayor Nigel Bowen said the government's water reforms are redefining ownership.

JOHN BISSET / Stuff

Timaru Mayor Nigel Bowen said the government’s water reforms are redefining ownership.

All three councils have expressed their opposition to the government’s water reforms.

They are concerned that the government has misunderstood the rights of advice to infrastructure assets.

The councils asked the court to declare that their ownership of the water infrastructure includes several exclusive rights, including the right to receive full, fair and independently assessed compensation if the assets are removed by law.

As part of the reform, ownership of the physical water infrastructure would be transferred to the new entities – and the new entities would be collectively owned by the boards.

According to Cabinet documents, a council’s property rights would be secured through its independent governance role (which is shared with local mana whenua / iwi) in the entities. The boards, while owning the entities, would not control their day-to-day operations.

Several councils have described government water reforms as the theft or grabbing of infrastructure by the government.  (File photo)

MARK TAYLOR / Tips

Several councils have described government water reforms as the theft or grabbing of infrastructure by the government. (File photo)

Timaru Mayor Nigel Bowen said the government’s water reforms are redefining ownership. “This is not property in the traditional sense that we would all be used to. “

Bowen said if the board was not technically the owner of the water infrastructure assets, it should receive “full and fair compensation.”

He didn’t say exactly how fair he expected it to be, except to point out that his council’s water infrastructure was worth around $ 600 million.

“Under the Public Works Act, if a road has to be crossed and someone’s house has to be purchased, they will receive full and fair compensation for that house,” he said.

Several councils described the reforms as the theft or grabbing of infrastructure by the government – although the government announced a funding program to help the councils financially once the new entities are operational.

Whangārei Mayor Sheryl Mai said the legal case is about understanding the meaning of property.

Denise Piper / Stuff

Whangārei Mayor Sheryl Mai said the legal case is to understand the meaning of property.

Whangārei Mayor Sheryl Mai said she believed full and adequate compensation would be for the entity to pay whatever it cost to replace the asset.

“In our district, the full replacement costs are approximately $ 1.2 billion.

Mai said the larger legal matter is about understanding what ownership means and therefore what the roles and responsibilities of the boards would be once the assets are transferred to a new water entity.

Waimakariri Mayor Dan Gordon said the lawsuit was a formal step to help persuade the government to halt water reforms and work with the local government to explore an alternative model.

Meanwhile, the three councils also asked the court to declare that the government’s three-water ad campaign should not contain misleading or incorrect information.

Earlier this year, an ad campaign for the reforms showed people swimming in green water, which sparked fury from some councils.

Bowen said he thought the campaign “was probably less than factual.”

He explained that if the court decides that these advertisements should not contain misleading or incorrect information, “then we have the option of saying, ‘Well did that mislead or provide incorrect information? “”

A spokesperson for the Interior Ministry confirmed having received the statement from the three councils.

The ministry was reviewing the statement and it was too early to comment, he said.


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