Opening Local Government New Zealand’s water summit on Wednesday, Dunedin Mayor and LGNZ president Dave Cull left those in attendance in no doubt about the task ahead writes Sam Sadcheva for Newsroom

With the damning findings of an inquiry into the Havelock North gastro outbreak still fresh in people’s minds, local and central government officials are mulling the challenge of fixing New Zealand’s drinking water, wastewater and stormwater supplies - referred to collectively as “the three waters”.

Retired Court of Appeal judge Lyn Stevens QC, who led the Havelock North inquiry, told the audience it was critical to avoid complacency when it came to tackling issues with drinking water quality.

Stevens’ report recommended an independent drinking water regulator to crack down on offenders, and he said it was crucial that there was someone able to hold water suppliers to account and prosecute them if necessary.

“Unless there’s a bunsen burner on the bottom, these things won’t happen, and it’s an area where you are flirting with people’s lives - people will get sick, people will die.”

Local Government Minister Nanaia Mahuta acknowledged Havelock North was a “sobering reminder” of the need to ensure New Zealand’s drinking water was high quality, and indicated significant changes were needed.

One question on everybody’s mind is how new water infrastructure will be funded, given the existing financial pressures on local government.

Helen Wyn, the Department of Internal Affairs’ deputy chief executive for central and local government partnerships, said the funding challenges for some councils were underpinned by rating bases that were small, and in some cases slowly declining.

Fulfilling just two recommendations from the Havelock North inquiry - mandatory compliance with drinking water standards, and mandatory treatment of drinking water from bores - was estimated to cost between $305m and $567m in capital expenditure, along with $11m to $21m in annual operating costs.

Wyn said the DIA had commissioned a project to get a better understanding of the cost pressures related to wastewater infrastructure, while it also needed to learn more about stormwater costs.

Then there are the costs of complying with any new water quality standards; an LGNZ discussion paper released at the summit said local authorities were often left in the dark about the true costs of implementing new regulations.

Moving to an aggregated regional model for water supplies, one of the options on the table, would allow the costs of new infrastructure for rural ratepayers to be partially subsidised by urban dwellers.

Mahuta acknowledged that could be an advantage, given it was “effectively unaffordable” for some smaller communities to upgrade their assets.

"That is a very real prospect ... obviously rural water suppliers, rural communities, struggle with keeping up with investment in their water asset infrastructure.”

“The old rule I used to work to is never waste a crisis, and that’s what we’re in now - we’re on a burning platform.”

Given the sensitivity around funding and local government control, it was understandable that Mahuta’s speech leaned heavily on platitudes about the consultation process ahead.

Talk of “open” conversations and discussions abounded, while she was keen to emphasise there were “no predetermined solutions” - although private ownership was off the table.

Mahuta said DIA’s three waters review would report back to the Government with some options for it to consider by October, with the “direction of reform” becoming clear some time next year.

“The decisions may be hard ones, but we will work with you openly and transparently as we make them,” she told the audience.

The Government is also taking its time on a formal response to the Havelock North inquiry; Mahuta said Health Minister David Clark was still working through the recommendations and would not be responding until later in the year.

What is clear is that all sides are readying themselves for drastic change, as LGNZ chief executive Malcolm Alexander said.