Bay of Plenty leaders have expressed their disappointment councils will be missing out on millions of dollars with changes to the Three Waters reform.

Tauranga City Council was set to get $48.4m in ‘better off' funding and the Western Bay of Plenty District Council would have received $21.3m.

Under the changes the second tranche of funding has been cancelled so Tauranga will receive $12.5m and the Western Bay will get $5.34m.

Tauranga City commission chair Anne Tolley and Western Bay mayor James Denyer say they are disappointed with the move.

Tauranga City Council allocated its ‘better-off' funding for the $304m civic precinct Te Manawataki o Te Papa, while Western Bay had yet to allocate the second tranche of funding.

Last Week, the government announced changes to Three Waters, now rebranded as 'Affordable Water Reforms”.

Now the management of wastewater, stormwater and drinking water will be handled by 10 regional based entities rather than four and the start date has been pushed back two years to July 2026, at the latest. .

The Bay of Plenty will have its own entity comprising of Tauranga City, Western Bay of Plenty, Rotorua Lakes, Kawerau, Ōpōtiki, and Whakatāne.

Commission chair Anne Tolley. Photo: John Borren/SunLive.

Tolley says the removal of the second tranche funding for councils is disappointing, but accepts that the creation of 10 smaller regional entities, will mean that some advantages of scale will no longer be available.

'While the better-off funding was earmarked as a contribution towards Te Manawataki o Te Papa, it was only one of numerous streams of funding available to match the rated portion of the civic precinct development costs,” she says.

'A comprehensive plan will be presented to council later this year that details how the development will be funded and the announcement made by the minister will be taken into account.”

Denyer echoes Tolley's disappointment and says the funding 'would have allowed council to spend a meaningful amount of money in our district to improve the wellbeing of our community”.

'It's a lost opportunity for us, but council had not considered in any detail precisely how this money would be spent, so we were not banking on this money for any project in particular.”

Western Bay of Plenty District Council allocated its $5.34m to an elder housing village redevelopment on Heron Crescent in Katikati.

Both Tolley and Denyer welcome the shift to the regional based entities.

'The process for councils to represent their communities' interests in the governance of the smaller entities will be much more straightforward and that is a positive outcome for all Bay of Plenty councils,” says Tolley.

Western Bay mayor James Denyer Photo: Brydie Thompson/SunLive.

'Providing every mayor of every local authority with a seat at the table of their respective entity will guarantee the priorities of local communities are heard and make it easier to retain a local workforce,” says Denyer.

Tolley says councils' concerns around the lack of detail in stormwater service delivery and assets have yet to be addressed.

She adds it's 'unfortunate” that there is no cross-party agreement on the shape of water services reform as we go into the election process later this year.

'That means that there is a risk that councils will be wasting their time, efforts and ratepayers' money on a process that could be substantially revised, if not reversed, by a future government.”

Responding to the leaders concerns, local government minister Kieran McAnulty says the government decided not to move ahead with the $1.5 billion second phase of ‘better off' funding to meet the additional costs of establishing ten entities.

It's also to ensure the new entities have the ability to borrow for investment, he says.

'Because $1 billion of the better off funding was to have been provided by water services entities borrowing, this will free up the same amount for the entities to invest in their drinking water, wastewater and stormwater networks.

'The remaining $500 million which was to be funded by the Crown will instead be used to help offset the higher costs of transition and entity establishment.”

The $500 million ‘no worse off' funding package will remain, which would help ensure that no council is left worse off as a result of the costs and financial impacts of the transition process, says McAnulty.

Under the reforms everyone would be 'economically better off” as a result of these changes versus doing nothing, he says.

'Our new approach will still make clean water more affordable, saving ratepayers on average $2770 - $5400 by 2053, and still keep a lid on future rate rises.”

'Evidence shows us inaction could see ratepayer's water bills balloon to $4,230 - $9,730 per household per year by 2053.”

Government data showed the estimated average cost per household for water services would be $6130 in Tauranga City and $6980 in the Western Bay of Plenty in 2054 under the current model.

With the regional entity model the average cost for each household in the Bay of Plenty region would be $2780.

This equates to a saving of $3350 in Tauranga and a $4200 saving for Western Bay homes.

'Kicking the can down the road comes at a hefty price to New Zealand households, we don't think they should have to pay,” says McAnulty.

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