Who’s on which team for water?
Saturday, 30 November 2024
Water has divided the Waikato region into two groups and councils are deciding who to throw their lot in with.
They face three choices: join Hamilton City Council and become part of a shared CCO (council controlled organisation), commit to Waikato Waters Done Well - a shared water services entity between ten Waikato councils, or consider their own CCO.
All councils need to decide on a Local Water Done Well option before September 2025, and implement it by 2028, according to Government legislation.
So far, Waipā, Matamata-Piako, Waitomo and South Waikato District councils have voted in favour of entering a Heads of Agreement to work on a regional option to manage their water assets.
Waikato District Council has made a non-binding agreement with Hamilton City Council to co-design a water services CCO for just the two councils. But the council is also keeping its options open and looking into the regional option - a decision is due on December 13.
Others are contemplating the pros and cons and will reveal their stance in the coming months.
Waipā District Council CEO Stephanie O’Sullivan said water infrastructure delivery in New Zealand was only going to get more expensive.
A $5 billion investment was required across the region, even without counting Hamilton, over the next decade.
During the decision-making, O’Sullivan said the focus was on ensuring a lid on increasing costs and making it affordable for ratepayers.
“Knowing that the investment has to be made, I think that it's got to be an entity that can attract the debt funding and the revenue funding to enable it to do its business.”
Keeping water as a separate entity would also lift the debt ceiling and mean it could borrow up to five times its revenue, as opposed to council’s current borrowing limit of 2.8 times, O’Sullivan said.
She said it was important to demonstrate to central government that councils could work together regionally.
Hamilton’s departure from a joint CCO had enabled rural and provincial councils, “that have a lot in common”, to unite and focus on similar water issues, O’Sullivan said.
“Hamilton's been able to go and focus on its metro issues.”
However, O’Sullivan was confident that if two entities came out from this discussion - Hamilton’s CCO and Waikato Water Done Well - they would merge at some point in the future.
“But it doesn't preclude working together.
“In the meantime, our boundaries don't change, and our communities will still be living and working across each other.”
Mayor Susan O’Regan said the decision on the future of water services delivery was the most critical the council would ever face.
“This is not a today decision, or even one that is about just tomorrow. This is about ensuring that regionally the Waikato is set up to deliver what our communities needs for decades to come,” she said.
Consultation with the community on the future delivery of water services will be held early next year.
Waitomo District Council chief executive Ben Smit said the decision meant councils could work together to design sustainable and affordable waters delivery for the wider Waikato into the future.
“This will be a long journey, and the benefits won’t be realised overnight, but we will work hard to ensure the best outcome,” he said
Waikato Water Done Well will be set up as an asset owning CCO from the outset and councils will own the company as shareholders.
When the CCO is first established, all councils will hold shares equally and will be referred to as Stage 1 shareholders. When it goes live and a council transfers its water services business into the CCO, Stage 2 shares will be issued to that council and it will become a Stage 2 shareholder.
Stage 2 shares will be allocated between councils based on the number of full connections.
A professional board of directors will be appointed by the shareholding councils, and members cannot be councillors or staff members of any of those councils.
Correction: This article has been updated to reflect that Waikato District Council is not only looking into a water services CCO with Hamilton City Council, as this story originally stated, but also the regional Waikato Water Done Well option. (Updated 4.20pm, December 3 2024)