Gore District Council (Otama Rural Water Supply) Bill

Madam Chair, thank you very much. I’m referring to the detail of the process now—which, of course, is really the whole point of this bill—and the fact that an ownership transfer needs to occur from the Gore District Council to the Otama Rural Water Supply Scheme. Part 2, clauses 5 through to 9, really just go into the nuts and bolts, and we are confident that the Otama Rural Water Scheme Committee has, indeed, complied with the requirements as set out in this bill. There has been a referendum held and, from memory, didn’t it have something like—the member in charge of the bill might recall—pretty much 100 percent agreement.

💬 Mark Patterson: 76.

It was 76, OK, thank you; 76—close enough. It had 76 percent agreement that the transfer of ownership should take place, which I think is a pretty good result—a pretty good ringing endorsement of the Otama community work in this rural water scheme.

So there was a referendum, it was conducted—and also the requirements which are set out in this bill will be followed as well. There needs to be a plan, obviously. We’ve had quite a large discussion about what constitutes the assets which will now form part of the plan, and while it might have seemed a bit of a dry old discussion, in fact it does matter, because the assets of the scheme to be transferred and the liability that goes with it—and it will be considerable liability as time goes on, in terms of renewals and upgrades and so forth—need to be absolutely clear. That was canvassed quite widely by the member in charge and also by Brett Hudson. That will form part of the transfer plan.

The plan will contain the following, in clause 9: “(a) a plan of the scheme;”—that’ll be by way of a map—“(b) a description of the land or property that is serviced by the scheme”—again, very important, because while there is above-ground infrastructure and in-ground infrastructure, in terms of ownership it needs to be very clear upon the transfer of the ownership just what is council-owned infrastructure, if, indeed, there is any, and what is scheme infrastructure—“(c) [any] further details of any … scheme assets, including specifying any permits or rights of any kind”—so that would be resource consents, easements, and those sorts of things in respect of the scheme assets.

Just while I’m on those resource consents and easements, there is nothing like a dispute over an easement to cause an awful lot of trouble and expense to the person who owns, or claims to own, the easement and the person who owns the land. It is vitally important that this part of the transfer is clear, is transparent, so that there can be no doubt and no dispute, because the granting of an easement conveys a claim over that land by the person to whom an easement has been granted. On the other hand, you have a landowner who feels that they have title to that land, and if the terms of the easement aren’t adhered to, there can arise a great sense of grievance. This is a small community and the likelihood, I would like to think, is very small, but none the less this is one of those instances where a shake of the hand is never going to be enough. The intention of this needs to be very, very clear. So that also is part of the transfer plan.

And “(e) any rules in the regional plan relating to the scheme.”—again, a very critical component of the scheme, because those rules in the regional plan will transfer with the ownership of the water scheme, as will any responsibilities to do with any future regulation that might come in to do with the management of drinking-water schemes in the future. That is a given, and it’s absolutely inherent in the nature of the legislative framework. So I’ve just picked out very briefly the transfer plan, and I know there are a number of colleagues who will pick out other aspects of Part 2.

Thank you very much, Mr Chair, and thank you to my colleague the Hon Jacqui Dean. I hope not to disappoint her high hopes for me in this contribution; I certainly hope that I can live up to the excellent standard that she and others have set already in this debate.

May I start by mentioning the work of the member in charge of the bill, Mark Patterson. It’s good to see you, as a fellow member of the class of 2017, albeit across the House, having an opportunity—a day in the sun, so to speak—on this bill of, no doubt, considerable local importance. You’ll be as aware as I am of that classic saying that all politics is local. Well, not all bills are local, not all Acts are local, but you’ve got an opportunity here to do something positive for community and I commend you for taking that opportunity.

I do have a couple of questions in relation to a couple of the clauses within Part 2 and I’ll outline those as I go through what seemed, to me, the key points about those clauses. They relate to the plans and assessments, so I draw your attention, Mr Patterson, to clause 8, “Requirements for plans and assessments”. I should prefix my comments by saying that I don’t have serious criticism in relation to these; it’s more a matter of seeking a bit of clarification, if you’re able to provide that, so that it will be obvious to anyone examining the debates afterwards exactly what was intended.

So at clause 8 then, under the heading of “Requirements for plans and assessments”, we see that “(1) The company must, to the council’s satisfaction” do various things that are set out (a), (b), (c), and (d). I’m wondering what it is that the member has in mind by way of the council’s satisfaction being expressed? Would that be something that would need to be provided within a certain period of time? For example, should it be provided in writing as a matter of course? Is it something perhaps that should take a particular form? I don’t think that there is a particular format suggested by way of schedule to the bill, but if I’ve missed something there then I’ll be grateful to hear that.

Then looking at each of those different requirements of the company, as defined, we see first, of course, that a transfer plan must be prepared, that to be compliant with clause 9—I’ll get to that, if I may, within my time a bit later. But also an analysis of the types of contractual arrangements that the company will need to enter into—and I think this is a positive feature of your bill, Mr Patterson and those who have been involved in the relevant local body in putting it together—essentially, to set out the sort of framework that’s going to be needed to enable this transfer that is to take place and to be allowed to take place, which is, of course, the whole point of the legislation in the first place.

At clause 8(c) we see that the likely future in capital and operating costs of the company must be assessed. It doesn’t actually say in so many words that a copy of that is to be provided to the council, but I think we can probably infer from the fact that the council must be satisfied with these things that that would be the case that that would be required. If there’s any comment you can provide on the question of the way that that assessment would be made, that would be useful. Perhaps, at a minimum, you might care to confirm from your position in the chair—excuse me, from that front desk—that workings and the basis for that assessment should be provided.

I’ll head now to the following clause 9, “Transfer plan”, and just make a note about a couple of the ways that this is constructed. The first relates to the opening comment, “The transfer plan must contain the following:”, of course, then it goes on to set out the things that must be within the transfer plan. I wonder, Mr Patterson, if you might consider, if not formally amending by way of Supplementary Order Paper then at least clarifying for the record, that a transfer plan could actually contain other items than this as well? So, actually, what’s been set out is something that we might say is without limitation, or using the phrase “including but not limited to” and so forth. Just to make it very clear that what’s been set out is a minimum standard, rather than something that is prescriptive, in that other things are precluded by that. A “plan of the scheme” is the first one, at paragraph (a). Paragraph (b), “a description of the land”, and presumably you have in mind a legal description which would state the deposited plan number and the lot number, typically, rather than a more general description of the land or property. No doubt it’s important to you and those who will be interacting with the bill to ensure that the right parcel of land is being referred to throughout.

I move, That the question be now put.

Thank you, Mr Chair. I would like to take this opportunity to contribute on the second part of this bill. Before I do that, I would like to acknowledge Hamish Walker, the local MP, who participated in all of this process from time to time, coming to the select committee and also going to Gore to listen to the submissions. So he is a hard-working MP who was there as a responsible member of Parliament for Gore.

💬 Darroch Ball: Why didn’t they ask him to sponsor it, then?

Because he was not given the opportunity to sponsor it. But this member of Parliament, Mark Patterson, who sponsored it, was missing and out of action for the whole process. Today is the first time we have seen him. So let’s come to the point why it was not sponsored. You need to ask your member why he was missing and out of action.

Basically, Part 2 gives the opportunity for the council to conduct a referendum. The referendum needs to be done within five years of the passing of this bill and its getting the Royal assent. The council will also contact the medical officer of the district health board. Clause 5(2) provides that the council will make “publicly available, in a timely and balanced manner prior to the referendum,—(i) the views of the Medical Officer of Health; and (ii) the transfer plan and the proposed agreement outlining the roles and the responsibilities of the Company and any contractors (including the Council) in relation to the scheme, as prepared by the Company under section 8;”. This is a very important aspect because the council has to make sure that the public is aware of what’s happening with their asset. This asset is very important to the people of Gore because it is the water supply scheme for that area. It is not only for their drinking water but for other purposes also. For the farming community over there, it is a very important asset.

Under clause 6, “Responsibility for conduct of referendum”, the council will need to prepare a special roll of persons eligible to vote under clause 7, and “the provisions of the Local Electoral Act 2001 apply, with any necessary modifications, to the conduct of the referendum under section 5(1)(b).” Clause 7, “Eligibility to vote in referendum”, provides that the people who are living in that area who are affected by this scheme are eligible to participate in this referendum. Also, if they are in this distribution area or if they can be in part of the distribution area in the future, they are also eligible to vote and participate in this referendum.

Paragraph (b) of clause 7 says that “a ratepayer elector under section 24 of the Local Electoral Act 2001 whose property, for the purpose of section 24(1)(a) or (b) of that Act, is a property—(i) serviced by the scheme or capable of being serviced by the scheme:” is also eligible to participate in this referendum. The other clause, clause 7(a), says that if the person is within the scheme distribution area, he is also eligible to participate in this referendum.

Then it goes on, and, in clause 9, it gives a plan as to how the transfer will take place. The first plan of the scheme must contain the following things, which include the plan of the scheme and a description of the land and the property that is serviced by the scheme and that is within the scheme distribution area. That is what I think my colleague Brett Hudson, the chair of Governance and Administration Committee, was trying to say—that we should have a specific requirement on this and that we should have a plan B. I don’t know why the sponsor of this bill did not take up that option.

Thank you, Mr Chair. I just take a call to respond to some of the issues raised here in Part 2. Just in terms of the referendum that has just been referenced, it is totally legitimate. Under the first-past-the-post system, there was a 76 percent rate in favour. The turnout was around 75 percent of those eligible, which we know is somewhere around that 223 entities. There was also a requirement to consult the Southern District Health Board medical officer of health and also local Hokonui Rūnanga. So that was a robust process and met all the requirements under section 7 and section 9 of the Local Electoral Act 2001.

I note that—and it’s relevant to Mr Penk’s point later on—this has to be enacted no later than the date five years after the commencement of this Act. So it is a legitimate vote. We do have time to bring this through within the very generous time frame of this vote. So there are no issues at all with legitimacy of the referendum. I actually commend the Gore council for going down this path rather than the more arduous, tortuous, and expensive legal route. To Mr Penk’s points in terms of the transfer: well, there are some quite stringent requirements placed on the company. They have to, essentially, be able to put a 30-year plan to the council to satisfy the council that they have the plan in place to deliver high-quality water to the people on the Otama Rural Water Supply scheme. In clause 8(1)(c), I think, it demonstrates that this has to be done to the council’s satisfaction.

In terms of putting in a time line, I do reference back to that referendum in that the five years is actually the default time line. I’m told that the Cold Creek precedent that we’re working off took a year. I note local government elections are coming up this year, and I pity any local councillor that will be seen dragging his feet trying to bring this through, given the feeling in Otama and the eastern Southland area in support of this. So there is, I think, within those clauses 8 and 9, plenty of certainty for what we’re trying to bring forward and getting the outcome that we’re trying to achieve.

Could I also just reference the medical officer of health, and the capacity to provide safe drinking water. I understand there is a Supplementary Order Paper coming forward that will amplify that a little bit and clarify that a bit, and I think that’s the outcome, ultimately, that we’re working towards. Everyone wants there to be safe, clean drinking water, whether it’s for stock, and, of course, for the potable water for the houses and schools and the marae involved. So the people here are the ultimate arbiters of this because they’re the consumers as well as the owners, so there is every intention and no stone will be left unturned.

They have got a track record, it’s been pointed out, of 45-plus years of delivering just such a service. So all the transfers that we’re talking about are merely technical transfers, in the sense that these people have already put the scheme in; they know every connection and pipeline that there is. So there is absolutely no ambiguity here in their mind; they’re not new to this, coming in “What are we going to do here?” They know implicitly. They have shown the governance and the ability to govern the management of this scheme to a very high level for a long time.

Thank you, Mr Chair. It’s a pleasure to speak on Part 2 of this Gore District Council (Otama Rural Water Supply) Bill. I particularly want to reflect on why and how it is that this part was structured as it was, because, as we considered the desire of the scheme users to have back what they saw as their assets and their scheme, there were concerns raised—at least, if not with officials, certainly with others other than the submitters in Gore—as to how we could be sure that it was the will of all of the people involved: the scheme users, the people that live within that scheme area, but also that of the other residents—citizens, if you will—of the district. It was with some consideration that we debated whether or not it should be affected through a referendum and the structure of that.

The fact that we have chosen and reflected in this bill that the provisions of the Local Electoral Act 2001 will apply, but with any necessary modifications to permit under this legislation—it was a reflection that we wanted to ensure that the process, for the rest of New Zealand, would look and be robust and thorough and appropriate, as we would expect in any other local government change. But we also had to debate and reach a position on whether residents who weren’t scheme users, and, indeed, people who might not be scheme users but live in that immediate vicinity, should have the sole right to determine what would happen with those assets, or would the argument be that because legally they were under the ownership of the district council, that every ratepayer within the boundaries of the district should, in fact, have a right to have their say on that as well.

I think, very sensibly, the Governance and Administration Committee determined that it should be people that are currently in the scheme or who live within the scheme’s physical boundaries who should have the right to have that say. But it was something that was given very serious consideration by the committee as we worked through this bill. We were balancing a need to make sure that the process itself around the transfer would stand up to scrutiny—not just from the people affected but, generally, under the principles of law and from other New Zealanders—but that it wasn’t going to allow for someone who had no interest and no potential future interest to determine the future of the scheme and the scheme assets.

It’s my view that the bill we have before us now in this process reflects just that. Also, because on top of the administrative process of the referendum, it requires that the company is able to establish and show to the council’s satisfaction that the company is able to deliver water through that supply that will meet water standards as set down by the medical officer of health—and not just standards as may exist today but there will be a continuing obligation on the company to meet those standards in the future as well.

The question I do have for the Minister in the chair—and it is a real question but perhaps not the most significant of all questions around the bill—is that we’ve put a sunset on this that the referendum must be completed within five years of the commencement of this Act. And, on the one hand, it seems like that should be readily attained, because we know that the scheme users want to get this done very quickly and we have the word, which we would take at face value, of officials from the district councils that they will comply with an earlier referendum which they undertook to determine whether they should comply with the request. But I do wonder whether the member feels that the sunset clause on the eligibility to undertake the referendum is appropriate.

It’s probably a small risk, but aren’t there risks that once the bill is passed—by the time the referendum is able to come about, it will be after a local body election—the Gore District Council make-up may have changed? Is there a risk to scheme users that, come November/December of this year, after these local body elections, they might find themselves with a council make-up that is not of the same mind as the Gore District Council has been to this point? So it is theoretically possible at least that they could find themselves in an environment which is obstructive to the purpose of the bill and is obstructive to their desire to move this through.

So I’d simply ask the Minister in the chair—and he’s obviously just been consulting with officials—despite us accepting the recommendation at the time for this five-year horizon, whether, on reflection, it might be more appropriate that some other horizon, if indeed any horizon at all, is permitted. There is a risk—I accept it’s not huge, but it’s a risk at the moment that’s out of our control because it could arise from the democratic process and election of councillors. So I’d love to hear the Minister’s view on that.

I move, That the question be now put.

I see some familiar faces here. I think they are looking forward to Nuk’s valedictory speech and not really listening to my speech, but nevertheless—nevertheless—since you are here, I think I should give you some background to this bill so that you have a better understanding about what we are talking about. This bill, a local bill, is a very small bill trying to authorise the transfer of the Otama Rural Water Supply scheme from the Gore District Council to the Otama Rural Water Supply committee. So that is the bill.

Now, this is Part 2, which is about the process for obtaining authorisation to transfer the scheme. While in Part 1 we talked about the purpose and we talked about the assets. In this part we’re talking about the details—how to make sure that we can manage the transfer from the council to the committee. The sponsor of the bill, Mark Patterson, said that it’s a very, very robust process. I agree. Indeed, if you look at this particular section, you’ll find that it will go through a few processes.

Firstly, the council need to make some documents publicly available, particularly the plans—all sorts of plans, particularly some agreements. So we’ll see here these kinds of documents so that people will have time to read and to digest and to decide whether they will support it or not. So there will be a referendum. Now, these plans, or agreements, right? Firstly, you have the plan. You have to do an analysis of the types of contractual agreements that the company will need to enter into with the council and other parties to obtain goods and services.

So this, basically, makes sure that, after transfer, the company—or, basically, the committee—will be able to have this kind of ability to maintain the scheme. You need to have this kind of agreement to make sure you have the ability to obtain the goods and services, and then you have to assess the likely capital and also the cost, because when you have someone to work for you, you need to have the money, and this transfer will make sure that the committee will be able to raise the funds to make sure that they have the money for 30 years to hire people, basically, to do the maintenance.

Thirdly, of course, this part will require the company to have this kind of ability to maintain and operate the scheme satisfactorily for a period of 30 years. So this is, basically, a very detailed process. In the meantime, we need to remember who will be able to vote in the referendum. This part, again, very, very clearly defines who should be able to vote, and only those users will be able to vote. Those who live in the area—those who are using the water from the scheme—will be able to vote.

When I was reading this particular section, there was one part where I was wondering whether people can really vote through the post, because people may not be able to go to Gore to vote in person. I was wondering whether it is possible for them to post their vote either in support or against. This part does not seem to clarify this. Perhaps, if we look at the Local Electoral Act, that may be very clear. But, on the other hand, I will say that this part is a very detailed process analysis, and it will make sure that transfer of the Otama Rural Water Supply scheme is to be successful, to be very smooth from the council to the committee, and therefore I do thank them, the sponsor of this particular bill, for their contribution, and I do believe it is indeed a robust process.

Thank you, Mr Chair. Just to respond to a couple of the points, and it will be enlightening as well. Mr Hudson, I think I’ll just reiterate the points I made before around those time lines and the five years. Yes, it does seem quite a long period, and you’re aware of the local feeling there. The precedent we have from Cold Creek is that it took a year. There is quite a lot to get through. There’s a lot of boxes to tick here and a lot of processes—[Interruption]

CHAIRPERSON (Adrian Rurawhe): Order! Sorry to interrupt the member, but would members who are entering the Chamber please pay some respect. We do have someone speaking to this bill. Find your seats, and we’ll carry on.

Thank you, Mr Chair. It’s good to see the wave of enthusiasm coming in for the Otama Rural Water Supply bill.

So there is a lot of local pressure. As I say, it’s local body politics. There are elections this year, so heaven forbid any local councillor who is looking to hold this up. But there is a bit to get through, so it is prudent to give it some time, and, of course, we have some regulations coming up that will more than likely shift the goalposts in terms of where that compliance needs to land. So I think that while the five years does seem quite generous, it is prudent, and I don’t think we need to adjust that.

In terms of the points Mr Young made, the scheme itself, in terms of being well resourced to meet its 30-year plan, is very, very well resourced. This has been an incredibly well-resourced scheme. They’ve prudently put their money aside, as we do in the South. It has been very well governed. It does have considerable means and, as I referenced earlier, they have replaced the whole mainline pipeline to cover 73,000 hectares in the last 15 years. They are well up to date with their maintenance. So there is plenty of money there.

In terms of the process around the election and whether you get into postal voting or how that is conducted, that, of course, will be dealt with in accordance with the Local Electoral Act 2001. Thank you.

The question was put that the amendments set out on Supplementary Order Paper 206 in the name of Marama Davidson to clause 8 be agreed to.