By Kira Carrington, Local Democracy Reporter
Brendan Kearney speaks at the Marlborough District Council’s Local Water Done Well hearing. Photo: LDR/Kira Carrington
Residents have spoken against the Marlborough District Council's preferred water services model at a Local Water Done Well hearing on Monday.
The Government requires councils to choose from five water service delivery options ‒ a modified status quo (an in-house council department), a single council-controlled organisation, a multi-council-controlled organisation, and two types of trusts.
The Marlborough District Council's preferred option is to create a standalone Water Services Organisation owned and controlled by the council.
The council said it would find greater efficiencies to deliver better service at a lower cost, and have more borrowing capacity to maintain and improve the region's water infrastructure.
But Marlborough residents aren't convinced. Of about 45 submissions made, 58 percent wanted to keep water services in-house, compared to 13 percent who preferred the standalone organisation. The remainder did not indicate a preference.
Five people spoke on their submissions at a hearing in the council chamber on Monday, and they were all opposed to a standalone organisation.
Brendan Kearney, who used to be chief financial officer of a council-controlled organisation in Canterbury, said there was no proof that a separate organisation would be more efficient, and setting up and funding a separate entity could cost ratepayers more.
It would "inevitably duplicate some overhead costs", Kearney said.
He said he saw no reason for water services to be removed from a council that had maintained its water systems relatively well.
"[Water] assets are in good or very good condition. That's a credit to the current council and past councils as well. Council also has low debt relative to its peers.
"This is compelling evidence, in my view, that the council has performed well and will continue to do so."
To create a separate organisation, Kearney said the council would need to appoint directors, manage a new relationship with the organisation, and manage the organisation's own agenda.
"A standalone company is no guarantee of good governance."
Kearney said there also needed to be balance in who footed the water infrastructure bill between the ratepayers of today and of tomorrow.
"It's unfair to gift hundreds of millions of dollars ... to the next generations completely debt free. That means the past generations paid too much.
"On the other hand, it's unfair to get those assets, billions of dollars of assets, fully debt funded ... it's unfair on future generations.
"Something in between those two extremes needs to happen."
Submitter Lauchy Hynd said that creating a separate organisation to take on debt outside the council books was not sustainable.
"What happens when we default?" Hynd said. "We're leveraging [water assets] by three to five times to borrow money against them.
"This looks to me like Three Waters from the back door.
"You can kick the can down the road and borrow recklessly, but I appeal to you to act boldly on behalf of the people."
Submitters also voiced concerns about allowing an unelected and "unaccountable" organisation to take control of water services.
"How do we maintain the ownership and the status of [water] assets in the hands of the people of Marlborough, when we're divesting them to an unelected group?" Hynd said.
Submitter Bob Watson said he was worried about the potential to more easily privatise a separate organisation, pointing how the United Kingdom's water management became privatised.
Ten regional water authorities were formed in 1974, which the UK government then sold to the private sector in 1989.
"I think that the potential for private ownership ... basically our water utilities to be sold off to another entity, and for us to lose the democratic voice, would be terrible," Watson said.
"I like the idea that [we're] here with people that have represented the community who can speak for us."
The coalition Government had previously said that privatisation of water services was not on the table.
The council would make its final decision on water services delivery on June 26, and submit its plan to the Government for approval by 3 September .
LDR is local body journalism co-funded by RNZ and NZ On Air.
