Three of four councils in the proposed Wairarapa-Tararua water services entity have approved a constitution and shareholders’ agreement, with the final council set to discuss next month. 

The constitution formed the legal foundations for the new company, while the shareholders’ agreement outlined how councils would work together as shareholders. 

It also established a stakeholders’ forum, giving both councils and iwi representatives a voice. 

But it wasn’t smooth sailing in Masterton, where councillors Tim Nelson and Brent Goodwin expressed concerns around their council’s inability to leave the agreement without unanimous consent from the other councils. 

“The fact that Masterton can’t exit without the approval of the other bodies - it sounds like a terrible deal for Masterton,” Goodwin said. 

The other council shareholders were Carterton, South Wairarapa, and Tararua. 

Nelson asked what would happen if Masterton District Council wanted to withdraw in the case that the conditions got “so poor for us - say price standardisation”. 

Amon Nunns, of law firm Bell Gully which prepared the shareholder documents, said if Masterton wanted to withdraw from the arrangement in the future “ it is not going to be easy - it’s intentionally that way”. 

“You can give notice of your intention to exit and would follow the process there but ultimately that process does not mandate that you can exit without the approval of other shareholders,” Nunns said.

He said there was a nine-year non-harmonisation period for charges, and any deviation from this would also require unanimous consent from the councils. 

Nelson said: “So even though we are the biggest council with the cheapest water and the strongest position, there isn’t an easy way for Masterton to withdraw, if say, price standardisation came in from the Commerce Commission before that nine years. We still can’t withdraw?” 

Deputy mayor Bex Johnson said she did not want to relitigate decisions that had already been made and was “happy to move what is in front of us”. 

Nelson said the agreement put the Masterton community at risk. 

“If we pass this constitution and shareholders’ agreement, we give away a unilateral right to withdraw. From that moment, Masterton is locked in, no matter what happens. 

“The biggest risk is price standardisation. Masterton has managed its water well and kept costs down, but if charges are ever standardised across councils, our residents will be hit with significant increases.

“It means families here in Masterton pay more to bring their costs in line with others. In simple terms, it’s our community subsidising water outside of Masterton.” 

Mayor Gary Caffell said it was a prudent decision to approve the shareholder documents. 

“We’ve had a long haul with this. This agreement is never going to be perfect, but it is still the most perfect decision as far as I’m concerned for Masterton. 

“The risks and costs of standalone were far greater than the risk of joining a joint entity.” 

Caffell said the four councils had worked “extremely well together” and were “certainly not out to play games against each other”. 

“This is really the only option we have and I believe we are safeguarding Masterton.” 

Johnson agreed that water charges under the joint entity would be “best for Masterton and better than standalone”.

“Non-subsidisation is in the constitution which requires unanimous agreement,” she said. 

“Our ratepayers will be protected through ringfencing and non-subsidisation, so at every stage we have looked after our Masterton ratepayers.” 

Goodwin and Nelson voted against approving the documents. 

Meanwhile in Carterton, councillor Grace Ayling voted against signing the documents, citing concerns that shareholding councils would not have as much influence as the proposed stakeholder forum.

South Wairarapa District Council was yet to approve the documents and would be meeting on October 8. 

Tararua District Council unanimously approved the constitution and shareholders’ agreement for the proposed joint water services entity. 

Mayor Tracey Collis said it was a milestone that reflected strong teamwork across the Tararua and Wairarapa councils and iwi partners. 

“By joining forces we’ll keep costs down, improve reliability, and unlock more funding for much-needed upgrades to our water infrastructure. 

“This is all about securing better water services for Tararua families, now and into the future.” 

The councils’ water services delivery plans were submitted to the Government in August. 

Once approved, the water services entity would be legally established by July 1, 2026, and would take over day-to-day water services from July 1, 2027. 

Each council would be a shareholder in the company, while operations would be managed regionally.

Collis acknowledged the support of the Minister of Local Government and the Department of Internal Affairs in guiding and assessing this process, and said she looked forward to continuing to work closely with them as the new organisation took shape. 

-LDR is local body journalism co-funded by RNZ and NZ On Air

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