Hamilton, Waikato District councillors look set to join forces on water

Monday, 9 December 2024

Hamilton City Council and Waikato District Council will vote this week whether they want to follow their staff’s recommendation to join forces. Pictured Fran O'Keefe-Jones waters her flower garden in Hamilton.

Hamilton City Council staff have recommended forming a joint water company with Waikato District Council to deliver water services.

Elected Members will consider what their recommended option will be on Thursday. That option, plus one other, is set to go out to the public for consultation next March before a final decision is made.

Waikato District Council staff have also recommended in its report to form a joint council controlled organisation (CCO) with Hamilton, and elected members will confirm on December 13 which of the three possible water service delivery options it prefers and to take forward for public consultation.

Waikato District Council chief executive Gavin Ion said the recommendation is by no means a final decision, as councillors will debate the merits of the possible options before making a decision which will go to public consultation when they meet on Friday.

In a press release, Hamilton City Council said the costs to establish a water company are estimated at $6 million. Costs would be debt-funded and transferred to the CCO with those costs offset by increased efficiencies over time.

Ion said key areas of growth and increased demand like Ngāruawāhia, Taupiri, Ruakura, Hopuhopu, Horotiu and Te Kowhai would be significant considerations for future services through a CCO formed jointly with Hamilton.

Waikato District Council CEO said growth in boundary towns is a significant factor in considering a joint CCO with Hamilton.

City staff said forming a “better together” CCO with Waikato District Council should be the preferred option when the future delivery of water services is put to the community next year.

Two other options – a Hamilton CCO and an in-house business unit – have also been analysed by the city. In a report to councillors, staff said there is a “clear long-term advantage” in forming a CCO with Hamilton’s northern neighbour. The door should also be left open to Waipā District Council (and others) joining, the report said.

Massive changes to water services have been driven by concerns about under-investment in critical water infrastructure nationwide. The government wants all councils to prove they have enough money to pay for water services and can invest what is needed, staff said in a press release.

Councils have been directed by the government to consider joining with their neighbours to create scale, drive efficiencies and get a better deal for ratepayers. Under the new water services legislation, council-delivered water services must remain in public ownership and cannot be privatised.

Hamilton City Council chief executive Lance Vervoort said forming a water company with Waikato District would have better long-term outcomes for the city and wider region. While the total amount of rates paid is the same under each of the three options, a CCO would enable both councils to better plan and finance growth, without being restrained by council boundaries.

He said a CCO would have far greater borrowing power, allowing both councils to smooth the cost of long-term infrastructure over generations of ratepayers.

“Hamilton does a good job with water but like every other council we face significant costs in the future. Increased regulation, growth and increasing compliance, means the cost of water services will go up nationwide and Hamilton is no exception,” Vervoort said.

He said the city needs a model that will capture scale efficiencies, and a joint CCO that services around 93,000 properties will put the council in a stronger position to tackle cross-boundary projects that the city “simply cannot do on our own”.

Vervoort said the joint CCO is what the government is looking for “that is far better for us, and for our neighbours.”

A joint water company will also be better for the Waikato River, he said.

“Instead of only considering the 16km of the river that goes through the city, a joint CCO would consider the impact of our activities on 150km of river.”

If a CCO is created, city ratepayers will see a separate waters bill. City councillors are already proposing to introduce targeted rates for each water service, based on capital value from 2025/26. The government has made all councils to separate their water services budget from other activities.