Scheme ownership referendum

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A water scheme for untreated water that was originally meant for farm animals but now supplies more than 200 consumers, two schools and a marae is at a crossroads.

After 15 months of discussions between the Gore District Council and the Otama rural water scheme committee about governance and management of the scheme, it was decided to hold a referendum.

The committee wants to severe its ties with the council and proposes to create a new company to own the scheme and hire a private contractor to operate it.

But achieving that aim will require an act of Parliament, which could take time.

Legally, the council is considered the owner of the scheme and has carried out maintenance such as repairing faults and leaks, and water testing.

The referendum will ask scheme users if they want the council to continue to own the scheme and be responsible for its day-to-day management and maintenance, or if they are in favour of the committee’s proposed new management structure.

Council chief executive Steve Parry said transferring ownership to a company was not a straightforward 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,” Mr Parry said.

If the majority vote was for company ownership, the council would support the initiation of a local member’s 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 subcommittee with consumer representation running the scheme and staff continuing to maintain it would be considerably easier and cheaper to put in place, he said.

So far the water scheme committee had spent $36,300 in legal fees. The council had spent $4600.

At this week’s meeting, the council resolved all costs incurred by the committee, including those of the referendum, would be paid for by scheme users.

Scheme users would be sent detailed information about the options and there would be a public meeting at the end of May, where each party would present its case.

Gore District Mayor Tracy Hicks expressed concern scheme users did not realise how much this process had cost them already, and the future costs.

A local member’s Bill was complicated and time-consuming, and the parliamentary process could take a couple of years, he said.

“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.”

Scheme committee deputy chairman John Kerse said after the meeting the “fly in the ointment” was that consumers on the scheme numbered more than 200, meaning the change in ownership required parliamentary intervention.

Mr Kerse stressed the scheme still supplied stock with water, which was its main objective.

The main thrust was the council wanted to put the relationship between the committee and council on a more formal basis, he said.

There had been discussion about the implementation of legislative requirements, such as health and safety plans.

If committee members carried out work on the scheme, that raised the question of who was responsible for health and safety, Mr Kerse said.

Future obligations associated with national drinking water standards for the scheme would also have to be met, he said.

The committee decided to make a bid to run the scheme after investigating similar schemes.

He did not think the cost of running the scheme would be too onerous.

“It will be no different than if the council’s running it,” Mr Kerse said.

“We believe we can run things as effectively as the council.”

Otama water supply .

Transferring ownership of the Otama rural water supply scheme would require a local member’s Bill initiated by a local authority, in this case the Gore District Council, sponsored by a local MP (Todd Barclay). A majority vote for the company ownership structure will trigger the process for a local member’s Bill. If the poll is in favour of continued council governance and management, no parliamentary action will be necessary.

The timeline for the process is:

Friday, April 7: electoral rolls open.

Friday, May 5: electoral rolls close.

Friday, May 12: letters sent to all eligible voters with information about the poll, the two options and notice of a public meeting.

Week starting May 22: a public meeting will be held.

Friday, June 9: voting document delivery begins via postal services.

Saturday, July 1: postal voting closes at noon.