Option 1: 'The four' (preferred option)

It’s the most affordable for our community

Together, our four councils serve 223,000 people, and we’re all within about an hour of each other. Our communities have strong links, and being close together, with a number of dense urban areas, means more connections per kilometre of pipe, which helps keep costs down.

Working together helps reduce costs over time

A joint water organisation could save money by buying supplies like pipes and treatment chemicals in bulk, using shared software and vehicles, and streamlining decision-making since it would focus only on water services.

This option is relatively local

This would make it easier to attract and keep skilled staff compared to some of the variations in Option 2, and allow for extra staff cover in the case of sickness/ leave etc.

The four councils would work together to set up the organisation

If this option is selected, the four councils would work together on a transition plan. It would appoint representatives to a joint committee known as a shareholder council. This group would then set up the new organisation by appointing a skills-based board of directors.

The shareholding council committee would also create a ‘statement of expectations’. That would outline Council's expectations, determine priorities, and set the strategic direction that would inform the decisions and actions of the organisation. Legislation also requires that the new water organisation prepares a water services strategy which would detail its approach to water management. That strategy would be reviewed every three years and relates to a period of at least 10 financial years, so it would act like a council long-term plan.

The board of directors would be ‘skills based’, meaning a mix of people with the experience and skills in managing large organisations with various stakeholders, and who may have utility experience.

The transition plan would include topics such as the expected start date, iwi involvement, scope of delivery services, location, customer experience and staff transitions.

A water organisation would be independent of Council. No elected members would be involved in its daily decisions.

The organisation is responsible for its own funding and for charging customers

The legislation requires that the new organisation must determine the funding needed for water services.

It would be responsible for all levels of service. This includes sourcing, treating, and discharging water, planning for future repairs and upgrades, charging for water, and keeping you, our community informed and involved.

As the water assets transfer to the water organisation, it takes on our ‘water-related’ debt. It can also borrow money for water construction (capital costs), separate from council borrowing. Currently, councils must balance water spending with other services they manage.

This also means that councils can keep investing in other services, such as transport, rubbish, recycling, and key community facilities. Councils would still consult and seek feedback on these other services through their long-term plans and other community consultations.

This is how a jointly-owned water organisation could be structured 

This diagram comes from the Department of Internal Affairs. We've added iwi to the side to recognise that we believe they should have a role.

Within 10 years, residential ratepayers could be paying around $2,100 per year for water under this option.

This figure drops to $1,400 in 30 years. These numbers are in today’s dollars and don’t include inflation. The potential cost in 10 years is more realistic than in 30 years. That’s because councils are using their long-term plans to determine the work. It’s hard to know what may change in 30 years so that number is less certain.

As the water organisation would be responsible for water services and the funding of those services, it would also be responsible for the water assets. Currently we have $66 million of debt related to those assets, which we would transfer to the water organisation to pay back. All the other councils in the option would do this too.

 We would also be able to remove all proposed water debt from our current long-term plan. This is approximately $340 million. While Nature Calls is included in the costs for this option, it’s not included in the debt. As we explain in our Long-Term Plan 2024-34, Nature Calls will need to be financed externally through the IFF Act. Removing the spending and forecast revenue from water services from our current long-term plan results in a $577 million reduction of available debt headroom over the 10 years of our plan.

We will still be able to invest in our other infrastructure areas, such as transport, rubbish and recycling, parks, community facilities and our venue and event facilities. But, the timing of these proposed projects may need to change. This means we still have capacity to do major infrastructure projects, but we would need to have a look at the timing of our planned projects – just like we did in our long-term plan.

The rating impact of removing water from Council is a bit more unclear. Fixed charges for water would no longer be billed to ratepayers, as the new water organisation would be responsible for charging for this.

Read the independent modelling report(PDF, 706KB)

Read the independent modelling report for scenarios for water CCOs in Manawatū-Whanganui(PDF, 624KB)

Who owns the water assets?

Under this option, the assets for water and wastewater would be owned by the water organisation, but Council remains a shareholder. It's likely we will continue to own all stormwater assets and be responsible for the work programme, but contract the day-to-day management to a water organisation.

Who makes decisions?

The board of the water organisation. But, this would be informed by statement of expectation from the shareholding councils.

Iwi involvement

Needs to be confirmed but we expect this to be discussed prior to setting up the organisation. We believe iwi should play a strong role in water management and our Council would expect similar involvement to what Rangitāne has with us at the moment.

Civil defence response

Councils and water organisations would work this out during the setting up of the organisation. Based on how civil defence works with other vital services, we expect the organisation would look after the water and we'd look after you our community. You can be assured looking after our community will always be a top priority for councils.

Legal compliance

Meets legal requirements.

Community affordability

A more affordable option for our community than Option 3.

Interest by other councils

At the time we adopted our consultation document, all councils listed are intending to consult on this option.

Scale

A population base of 223,000 people means there are more people to pay for water than our current population. This option could also create efficiencies through things like procurement, for example, buying pipes and treatment chemicals, software, vehicles etc. We would also be able to attract and retain specialist staff.

Geography

We’re all located together which means we can be more efficient in responding to our communities. For example, operational centres, vehicles and people are closer together, which means there could be faster responses. This would also be beneficial in a civil defence response. This option has more dense urban areas across the council boundaries, which means there are more water connections per kilometre of pipe – this can help keep costs down. There are also no major geographical challenges, such as ranges or mountains, for us to work around.

Governance 

Councils within this option already have established relationships. This means setting up an organisation and the ongoing governance could be easier.

Water service

Would meet legal requirements. It’s also likely that water services could improve, as with more people able to pay, and an increased ability to borrow, the water organisation could invest in this work sooner than what councils could.

Impact on other council services

It’s unlikely to have the negative outcomes on all other council services that Option 3 has. Council also may still choose to look at services we provide through subsequent long-term plans and seek public feedback.

Growth and development

Again, the scale means the water organisation would have a better ability to prepare for and manage future growth needs for water.

Climate change mitigation

With the advantage of scale, improved efficiencies and an increase in borrowing capacity, more climate change mitigation could be likely.

Environmental outcomes

With the advantage of scale, improved efficiencies and an increase in borrowing capacity, better environmental outcomes could occur.

Social impact

Option 1 has better social impacts than Option 3 as we can continue to invest in other service areas and help create connectedness.

Community involvement in decision-making

There are unlikely to be opportunities for the community to be involved in making decisions. There could be consultations from time to time. The community would need to advocate for services if they had concerns. However, councils can also influence the organisation as shareholders.

Council’s role

Councils would have no day-to-day involvement in water service delivery. But the shareholding councils would be creating a statement of expectations, which would be monitored closely.