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South Taranaki District Council (Cold Creek Rural Water Supply) Bill Local Bill As reported from the Local Government and Environment Committee Commentary Recommendation The Local Government and Environment Committee has examined the South Taranaki District Council (Cold Creek Rural Water Supply) Bill and recommends by majority that it be passed with the amend- ments shown.
Introduction The South Taranaki District Council (Cold Creek Rural Water Sup- ply) Bill seeks to establish a process by which the council may obtain the authority to transfer the Cold Creek Rural Water Supply Scheme to Cold Creek Community Water Supply Limited.

The scheme pri- marily provides water for farming purposes, and services around 162 connections in an area covering 7,620 hectares in the Pihama/Te Kiri area in South Taranaki.
Cold Creek Community Water Supply has managed the scheme since 2001 through an informal arrangement with the Council.

This arrangement is deemed to be unsatisfactory 338—2 2 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Commentary as regards the present management and operation of the scheme, and the way the capital costs were originally funded.

This commentary covers the key amendments we recommend to the bill.

It does not cover minor or technical amendments.


Interpretation We recommend amending clause 4 by dividing the definition of “scheme assets” into capital assets (previously paragraphs (a) to (i)) and rights and privileges (previously paragraphs (j) to (l)).

We pro- pose this separation for consistency with the Resource Management Act 1991.
We also recommend amending clause 4 to exclude the cross linkage pipeline (beyond the connection point or tee junction) that may be used to supplement the Opunake water supply in certain emergency situations.

This pipeline would remain in Council ownership should the scheme be divested.

The amendment we propose would make this intent clear.
Transfer process We recommend amending clause 5 to provide an opportunity for au- thorities representing iwi whose rohe wholly or partly encompass the scheme distribution area to be consulted, and for the Council to make their views publicly available.

These amendments are consis- tent with section 14(1)(d) of the Local Government Act 2002, which says that “a local authority should provide opportunities for Māori to contribute to its decision-making processes”.
Eligibility to vote in referendum We recommend amending clause 7 to make it clear that eligibility to vote would be restricted to properties within the scheme distribution zone.

We considered whether the residents of Opunake should be included in the referendum in recognition of the emergency supply agreement, but ultimately decided not to recommend such an amend- ment.

We also considered whether the referendum should include all elect- ors in the South Taranaki region.
However, the public subsidy for construction of the scheme came from taxes not rates, and it would Commentary South Taranaki District Council (Cold Creek Rural Water Supply) Bill 3 be impractical to have a referendum over the whole country.

The majority of us believe that it is fair for the referendum to cover only those covered by the scheme.
We have been assured that the Council and the Company have agreed to continue the current arrangement for the scheme to supplement the Opunake water supply in an emergency.

We also recommend a consequential amendment to clause 9(b).
Requirements for plans and assessments We recommend several amendments to clause 8, to require the Com- pany to assess its capability and commitment if property within the scheme’s distribution zone were to be transferred or leased to another person, and to clarify that the assessment includes the supply of water to Opunake in emergencies.

We also recommend amendments to require the Company to prepare a protocol for appropriate liaison with relevant iwi whose rohe lie in the distribution area.
Matters relating to transferring the scheme We recommend deleting clauses 12(1) and 13.

Clause 12(1) seeks to exempt the Council from certain duties imposed by section 125 of the Local Government Act 2002 (assessments of water and sanitary services); while clause 13 would exempt the Council from certain duties relating to drinking water under the Health Act 1956.
These provisions are outside the scope of the bill as expressed in the ex- planatory note and clause 3, and we therefore recommend deleting them.

We are aware that the Council felt the Company should be contracted to assist the Council in meeting its statutory obligations, and should indemnify the Council against liabilities.
We are assured that the Council and the Company have agreed to provide the Council with any information it needs to complete an assessment under section 125 of the Local Government Act, and have also agreed to a binding and irrevocable indemnity regarding the obligations of the Council under the Health Act relating to drinking water.
We also recommend inserting new clause 13A to require the South Taranaki District Council to notify the Taranaki Regional Council, as 4 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Commentary soon as practicable, that the scheme has been transferred.

This would allow the regional council to liaise with the Company on resource management matters.
Green Party minority view The Green Party does not support the Council’s divestment of the Cold Creek Water Supply given significant public funding for the scheme infrastructure, including a 1984 Crown grant of $1.28 mil- lion for half of the scheme’s construction costs and ratepayers’ con- tribution to its operating costs.
It remains concerned about the poten- tial for the scheme’s privatisation to affect the value of and potential rental return from leases in perpetuity over Māori reserve land in the scheme area and the land owners’ access to water from the scheme.

The Green Party shares the concerns of Taranaki Iwi and Ngati Rua- nui about the precedent which the bill may set for water management.
The Green Party considers that the referendum should include all residents of South Taranaki District because of past public funding of the scheme and because of officials’ advice that the Council’s pro- posed divestment was not sufficiently described in the Council’s draft Long Term Plan for 2012–22 to provide a basis for public consult- ation.
Commentary South Taranaki District Council (Cold Creek Rural Water Supply) Bill 5 Appendix Committee process The South Taranaki District Council (Cold Creek Rural Water Sup- ply) Bill was referred to the committee on 21 March 2012.

The clos- ing date for submissions was 3 May 2012.

We received and con- sidered 41 submissions from interested groups and individuals.

We heard four submissions.

We received advice from the Department of Internal Affairs.
Committee membership Nicky Wagner (Chairperson) Maggie Barry Jacqui Dean Paul Goldsmith Gareth Hughes Raymond Huo Nikki Kaye Hon Annette King Moana Mackey Eugenie Sage Hon Dr Nick Smith Andrew Williams Hon Chester Borrows participated in the consideration of this bill.
South Taranaki District Council (Cold Creek Rural Water Supply) Bill Key to symbols used in reprinted bill As reported from a select committee text inserted unanimously text deleted unanimously Hon Chester Borrows South Taranaki District Council (Cold Creek Rural Water Supply) Bill Local Bill Contents Title Commencement Purpose Interpretation Part 1 Preliminary provisions Part 2 Process for obtaining authorisation to transfer scheme Council to follow transfer process Responsibility for conduct of referendum Eligibility to vote in referendum Requirements for plans and assessments Transfer plan Part 3 Matters relating to transfer of scheme 10 11 12 13A 14 15 Application of Part Certain matters not affected by transfer of scheme Application of Local Government Act 2002 Taranaki Regional Council to be advised of transfer Taxation and duties provision Transfer of land 338—2 Page 2 2 2 2 4 5 6 6 7 7 7 8 8 9 9 1 cl 1 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Schedule 1 Description of land on which Cold Creek Community Water Supply treatment plant situated Schedule 2 Map of scheme distribution area 10 11 The Parliament of New Zealand enacts as follows: Title This Act is the South Taranaki District Council (Cold Creek Rural Water Supply) Act 2011.
Commencement This Act comes into force on the day after the date on which it receives the Royal assent.

5 Part 1 Preliminary provisions Purpose The purpose of this Act is— (a) to specify the process that the South Taranaki District Council must follow to authorise a transfer of the Cold Creek Rural Water Supply Scheme to Cold Creek Com- munity Water Supply Limited; and to provide for certain related matters if the scheme is transferred to the Company.
(b) 10 15 Interpretation In this Act, unless the context otherwise requires,— Company means Cold Creek Community Water Supply 20 Limited Council means the South Taranaki District Council iwi authority has the same meaning as in the Resource Man- agement Act 1991 Registrar means the Registrar-General of Land 25 1 2 3 4 2 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Part 1 cl 4 scheme means the Cold Creek Rural Water Supply Scheme that is vested in the Council, and includes the scheme assets scheme assets means the real and personal property of the Council that is held or used (whether solely or partially) for the purposes of the scheme and includes— (a) (b) (c) the intake structure: the treatment plant: the land on which the treatment plant is situated, being the land described in the Schedule: the in-ground covered reservoir: two waste discharge ponds: the pipes and pressure reducing valves: other valves and supply point connections: all water meters for the scheme: the electronic control and monitoring equipment: land use consent 5554 (to erect and maintain an intake structure): (d) (e) (f) (g) (h) (i) (j) 5 10 15 (k) water permit 1134–2 (to take up to 5 095 cubic meters (l) per day or 59 litres per second): discharge consent 6077 (to discharge filter backwash 20 water and supernatant).
(b) scheme assets— (a) means the real and personal property of the Council that is held or used (whether solely or partially) for the pur- poses of the scheme; and includes the following: (i) (ii) (iii) the intake structure: the treatment plant: the land on which the treatment plant is situated, being the land described in Schedule 1: the in-ground covered reservoir: two waste discharge ponds: the pipes and pressure-reducing valves: (iv) (v) (vi) (vii) other valves and supply point connections: (viii) all water meters for the scheme: (ix) the electronic control and monitoring equipment; and (c) includes the following resource consents granted under the Resource Management Act 1991: 3 25 30 35 Part 2 cl 5 South Taranaki District Council (Cold Creek Rural Water Supply) Bill (i) land use consent 5554 (to erect and maintain an intake structure): (ii) water permit 1334–2 (to take up 5 095 cubic (iii) metres per day or 59 litres per second): discharge consent 6077 (to discharge filter back- 5 wash water and supernatant); but (d) does not include the cross-linkage pipeline (beyond the connection point) used for the purpose of providing water to Opunake residents in certain emergencies scheme distribution area means the area coloured blue on the 10 map set out in Schedule 2.
15 20 Part 2 Process for obtaining authorisation to transfer scheme Council to follow transfer process The Council must transfer the scheme to the Company if— (a) (b) (c) the Council has consulted on the proposal with the Med- ical Officer of Health for Taranaki; and the Council has made publicly available in a balanced and timely manner prior to the referendum— (i) (ii) the views of the Medical Officer of Health; and the transfer plan and the proposed agreement out- lining the roles and responsibilities of the Com- pany and any contractors (including the Coun- cil) in relation to the scheme, as prepared by the 25 Company under section 8; and the assessments made by the Company under section 8; and (iii) the proposal is supported, in a referendum conducted under section 9 of the Local Electoral Act 2001 using 30 the First Past the Post electoral system, by more than 50% of the votes cast by the persons eligible to vote under section 7.
Council to follow transfer process The Council must transfer the scheme to the Company if— 35 the Council has complied with subsection (2); and (a) 5 5 (1) 4 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Part 2 cl 7 (b) the transfer is supported, in a referendum conducted under section 9 of the Local Electoral Act 2001 using the First Past the Post electoral system, by more than 50% of the votes cast by the persons eligible to vote under section 7.
5 The Council complies with this subsection if— (a) the Council has consulted on the proposed transfer with— (i) (ii) the Medical Officer of Health for Taranaki; and every iwi authority in relation to each iwi whose 10 rohe comes, wholly or in part, within the scheme distribution area; and (b) 15 the Council has made publicly available in a balanced and timely manner prior to the referendum— (i) (ii) the views of the Medical Officer of Health; and the views of every iwi authority consulted under paragraph (a)(ii); and the transfer plan and the proposed agreement out- lining the roles and responsibilities of the Com- pany and any contractors (including the Coun- 20 cil) in relation to the scheme, as prepared by the Company under section 8; and the assessments made by the Company under section 8.
(iii) (iv) 25 Responsibility for conduct of referendum The Council is responsible for conducting the referendum under section 5(c) 5(1)(b).

The electoral officer of the Council must prepare a special roll of the persons eligible to vote under section 7.

The provisions of the Local Electoral Act 2001 apply, with 30 any necessary modifications, to the conduct of the referendum under section 5(c) 5(1)(b).
Eligibility to vote in referendum A person is eligible to vote in a referendum conducted under section 5(c) if the person is qualified as either— (a) a residential elector under section 23 of the Local Elect- oral Act 2001 and the address in respect of which the 35 5 (2) 6 (1) (2) (3) 7 Part 2 cl 7 South Taranaki District Council (Cold Creek Rural Water Supply) Bill (b) person is registered as a parliamentary elector is a prop- erty serviced by the scheme or capable of being serviced by the scheme; or a ratepayer elector under section 24 of the Local Elect- oral Act 2001 and the property, for the purposes of sec- 5 tion 24(1)(a) or (b) of that Act, is a property serviced by the scheme or capable of being serviced by the scheme.
Eligibility to vote in referendum A person is eligible to vote in a referendum conducted under section 5(1)(b) if the person is qualified as either— (a) a residential elector under section 23 of the Local Elect- oral Act 2001 and the address in respect of which the person is registered as a parliamentary elector is a prop- erty— (i) serviced by the scheme or capable of being ser- 15 viced by the scheme; and 10 (b) (ii) within the scheme distribution area; or a ratepayer elector under section 24 of the Local Elect- oral Act 2001 and the property, for the purposes of sec- tion 24(1)(a) or (b) of that Act, is a property— (i) serviced by the scheme or capable of being ser- viced by the scheme; and (ii) within the scheme distribution area.
Requirements for plans and assessments The Company must, to the Council’s satisfaction,— (a) (b) (c) prepare a transfer plan which complies with section 9; and prepare an analysis of the types of contractual arrange- ments that the Company will need to enter into with the Council and other parties to obtain goods and ser- 30 vices in relation to the maintenance and operation of the scheme; and assess the likely future capital and operating costs of the Company to maintain and operate the scheme for a period of 30 years from the proposed date the scheme is 35 to be transferred to the Company; and 20 25 7 8 (1) 6 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Part 3 cl 11 (d) (e) assess the ability of the Company to maintain and oper- ate the scheme (including providing water to Opunake residents in certain emergencies) satisfactorily for a period of 30 years from the proposed date the scheme is to be transferred to the Company.
; and prepare a protocol that provides for appropriate consult- ation by the Company with every iwi authority in rela- tion to each iwi whose rohe, wholly or in part, comes within the scheme distribution area.

5 The assessment under subsection (1)(d) must include an as- 10 sessment of the Company’s ability and commitment in relation to any property within the scheme distribution area if the prop- erty were to be transferred or leased to another person.
15 Transfer plan The transfer plan must contain the following: (a) (b) a plan of the scheme; and a description of the land or property which that is served serviced by the scheme and that is within the scheme distribution area; and further details of any of the scheme assets, including 20 specifying any permits or rights of any kind in respect of any of the scheme assets; and any rights conferred by designations under the district plan applying to any land relating to the scheme; and any rules in the regional plan relating to the scheme.
25 (c) (d) (e) Part 3 Matters relating to transfer of scheme Application of Part This Part applies if the Council transfers the scheme to the Company.
30 Certain matters not affected by transfer of scheme The transfer of the scheme to the Company— (a) does not constitute a breach of contract or agreement, or a civil wrong; and 7 (2) 9 10 11 Part 3 cl 12 South Taranaki District Council (Cold Creek Rural Water Supply) Bill (b) (c) (d) (e) is not to be regarded as giving rise to a right for any per- son to terminate or cancel any contract or arrangement or to accelerate the performance of any obligation; and is not to be regarded as placing the Council, the Com- pany, or any other person in breach of any enactment 5 or rule of law or contractual provision prohibiting, re- stricting, or regulating the assignment or transfer of any property or the disclosure of any information; and does not release any surety or guarantor wholly or in part from any obligation with respect to the scheme; and 10 does not invalidate or discharge any contract or security.
15 20 12 (1) (2) Application of Local Government Act 2002 The Council is not required to include the scheme in any assessment under section 125 of the Local Government Act 2002.

Subpart 2 of Part 7 of the Local Government Act 2002 does not apply to the scheme.
Application of Health Act 1956 13 (1) On and from the date that the scheme is transferred to the Com- pany,— (a) (b) the Council is exempt from the duties imposed on it by Part 2 of the Health Act 1956 as those duties relate to the scheme; and it is the duty of the Ministry of Health to do all such things as it considers necessary for the improvement, 25 promotion, and protection of public health in relation to the scheme.
(2) All expenses incurred by the Ministry in the exercise of powers under this section are recoverable from the Company as a debt due to the Crown.

30 13A Taranaki Regional Council to be advised of transfer As soon as practicable after the scheme is transferred to the Company, the Council must notify the Taranaki Regional Council that the scheme has been transferred to the Company and the date of the transfer.
35 8 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Part 3 cl 15 14 (1) (2) 15 (1) Taxation and duties provision For the purposes of the Goods and Services Tax Act 1985, the transfer of the scheme from the Council to the Company is a transfer of part of a taxable activity as a going concern that is capable of separate operation.

For the purposes of the Estate and Gift Duties Act 1968, the transfer of the scheme from the Council to the Company is not a disposition of property.
5 Transfer of land Subject to subsections (2) to (4), the Registrar, on written 10 application, is authorised on payment of the appropriate fee, to make such entries in the registers and do all such things as may be necessary to give effect to the transfer of the scheme to the Company.
(2) Nothing in sections 40 to 42 of the Public Works Act 1981 15 applies to the transfer by the Council of any land or interest in land to the Company so long as the land or interest in land continues to be used for the purposes of the scheme.

(3) However, if all or any part of the land or interest in the land is no longer required for the purposes of the scheme, sections 20 40 and 41 of the Public Works Act 1981 apply to the land or interest no longer so required as if the Company were the Council.
The Registrar must endorse on every computer freehold regis- ter transferred to the Company the effect of subsections (2) 25 and (3), when the land or interest in the land is transferred to the Company.
(4) 9 Schedule 1 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Schedule 1 Description of land on which Cold Creek Community Water Supply treatment plant situated s 4 Area Description 1.4320 hectares Lot 1 on DP 16088, being part Section 5 Block V Kaupokonui District Certificate of Title TN H4/479 10 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Schedule 2 Schedule 2 Map of scheme distribution area s 4 11 South Taranaki District Council (Cold Creek Rural Water Supply) Bill Legislative history Introduction (Bill 338–1) First reading and referral to Local Government and Environment Committee 6 October 2011 21 March 2012 12 Published under the authority of the House of Representatives—2012 Wellington, New Zealand: 12