7 April 2017
Poll to decide future of rural water scheme
Otama Rural Water Supply Scheme users are being given the chance to decide the future ownership and management of the scheme in an upcoming referendum.
The referendum is the culmination of over 15 months of discussions between the Gore District Council and Otama Rural Water Scheme Committee about governance and management of the scheme.
Historically, the Council has managed and maintained the scheme on behalf of the committee carrying out work such as responding to faults and leaks, water testing and liaising with users.
Under the Local Government Act 2002 the Council is considered the owner of the scheme.
The scheme committee wants to severe it ties with the Council. It proposes to create a new company to own the scheme and get a private contractor to operate it.
The referendum will ask scheme users if they want the Council to continue ownership of the scheme, and the day-to-day management and maintenance, or if they want to go with the committee’s new management structure.
Gore District Chief Executive Stephen Parry said the vote will be binding on the Council. However, handing ownership of the scheme to a company was not a straight forward process.
“At present legislation dictates the Council must retain control of the scheme because it supplies water to more than 200 consumers.
“To allow ownership to go to a company, even one where all the shareholders are scheme users, will require an act of Parliament.”
If the majority vote was for the company ownership structure, proposed by the committee, the Council will lend support to the initiation of a Local Members’ Bill.
“This will be subject to the usual rigours of the parliamentary law making processes, including consideration by a select committee,” Mr Parry said.
The Council’s option of a sub-committee with consumer representation running the scheme and staff continuing to maintain it would be considerably easier and cheaper to put in place, he said.
The committee’s bid to take control of the scheme has cost $36,300 in legal fees to date. At its meeting this week the Council resolved that all costs incurred by the committee, including the referendum, would be paid for by scheme users.
Mr Parry said scheme users will be sent detailed information from the Council and the scheme committee about their respective options. It covers off such issues as scheme ownership, management and maintenance, water quality and consumer health responsibilities, and communication.
“We want to make sure all scheme users have the facts so they can make an informed vote,” Mr Parry said.
There will also be a public meeting towards the end of May where each party will present its case. Voting papers will be sent out after the meeting.
Gore District Mayor Tracy Hicks said he was concerned scheme users did not realise how much this process had cost them already and future costs.
A Local Members’ Bill was complicated and time consuming, and could take a couple of years to work its way through the Parliamentary process depending on other legislative priorities.
“It will make a serious dint in the $430,000 the scheme has in reserves. Even then there’s no guarantee it will be successful.”
Mr Hicks also questioned how a private company, driven by making a profit, could manage and maintain the scheme cheaper than the Council.
The electoral roll opens this Friday. Voting papers will be sent out in June and voting closes on 1 July.
Otama Rural Water Supply Scheme quick facts
The scheme supplies untreated water to 253 connections on 210 farms in the Gore District.
There is 239km of pipeline.
The water comes from a bore next to the Mataura River, at the Pyramid Bridge.
Numerous homes, as well as two schools and a marae, use the untreated water.
Historically, the Council has managed the scheme on behalf of the Otama Rural Water Supply Scheme Committee. This includes repairing leaks, invoicing users, water quality testing and managing boil water notifications
The scheme is registered with the Ministry of Health in the Council’s name and we hold the consent to draw the water.
The scheme committee wants to cut its ties with the Council, create a new company to own the scheme and get a private contractor (at this stage unspecified who that may be) to operate it.
Legislation (Local Government Act 2002) dictates that water schemes managed by a council as at 1 July 2003, and supplying more than 200 consumers, must remain in the control of that council.
To change ownership will require a Local Members’ Bill. It must be sponsored by the local Member of Parliament.
A poll of scheme users, run under the Local Electoral Act, is being held to determine whether
- The Council should own, govern and manage the scheme in the future, or
- The scheme should be owned by a company whose shareholders are scheme users and managed by parties other than the Council (as proposed by the existing committee).
A majority vote for the company ownership structure will then trigger the process for the Local Members’ Bill to Parliament.
If the poll was in favour of continued Council governance and management no Parliamentary action would be necessary.
The water scheme committee has spent $36,300 on legal fees to date. This has been paid from the scheme’s financial reserves of $430,000.
The Council has spent $4600 on legal fees.
The cost of the poll and the Local Members’ Bill, should it proceed, will be borne by scheme users, as resolved by the Council at its meeting on 4 April.
The Council and the scheme committee agreed to a template to present their options to scheme users.
It addresses questions around scheme ownership, water quality and consumer health responsibilities, costs of any changes to governance and continued operation of the scheme and communication with consumers.
The options will be posted to all consumers and there will be a public meeting where both parties can present their case and answer questions. Voting papers will be distributed after this meeting.
There are two electoral rolls – a residential roll and a ratepayer roll. A person can be on only one roll.
Those eligible to vote are:
- People on the parliamentary electoral roll whose residential address is serviced by the scheme. They will be on the residential roll.
- The ratepayer of a property serviced by the scheme who lives elsewhere. They must apply to be put on the ratepayer roll, or they can nominate someone else to become a ratepayer elector.
- Friday 7 April – electoral rolls open
- Friday 5 May – electoral rolls close
- Friday 12 May – letters sent to all eligible voters with information about the poll, the two options and notice of a public meeting
- Week starting 22 May – public meeting
- Friday 9 June – voting document delivery begins via postal service
- Saturday 1 July – postal voting closes at 12 noon