This option would see our Council, Mackenzie District Council and Timaru District Council form a new water services organisation. This organisation would manage water services across all participating areas and take on each council’s water-related assets and debt.

A professional board of directors, appointed by the councils, would govern the organisation, and appoint a chief executive, who would run the organisation on a day-to-day basis.

While we and the other shareholding councils could guide the board and continue to make some key decisions, we would not control every aspect of the organisation’s work.

Running water services and investing in the infrastructure would become the responsibility of the water services organisation, similar to how electricity line companies work.

Over time, we expect this new organisation would bill customers directly for its services, but in the meantime, we expect that councils would continue to collect water revenues through rates bills.

How would we have a say in a joint water organisation?

If we do decide to join up with others, we will still get to make some decisions about how water services are delivered. There are ways for us to monitor and direct the organisation to make sure that your water services are being delivered well and that our district’s needs are being met. This would include:

• Appointing the board of directors, jointly with the other councils, so we can make sure the board has the skills and experience we collectively want.
• Jointly issuing a Statement of Expectations to set priorities for the organisation and specify how progress against them would be measured. This Statement would guide the organisation’s decisions and actions, and the organisation would need to give effect to the Statement and report against it.
• Requiring regular reporting from the water services organisation on how it is performing, including through an annual report on progress, service standards, and financial performance.
• Negotiating a number of additional protections to include in the organisation’s constitution, such as consulting with our community.

Key advantages

• Specialist oversight: A professional, expert board can make informed decisions and respond quickly to changing needs
• Greater capacity: A larger combined organisation can hire more specialised staff and manage assets and new projects more effectively
• Delivering our investment plans: The organisation would probably adopt the Council’s current investment plans, which have been independently reviewed. These plans may need further investment over the next 10 to 30 years
• Long-term savings: By combining resources (such as maintenance services) across multiple councils, the organisation can drive down costs over time
• Efficient borrowing: The water organisation can borrow at similar rates to councils but takes a different borrowing approach that makes it easier to invest in infrastructure and maintain quality standards affordably
• More financial flexibility for the Council: With water debt removed from its books, the Council can redirect its financial capacity to other priorities as needed and retain debt headroom for unanticipated emergency expenditure

Key disadvantages

• Less local control: We would share decisionmaking and control with other councils. The decision-making may feel distant for residents in smaller communities
• Transition challenges: Establishing the new water organisation is a big task, and coordinating the transition of water services, staff, and debt could be complicated. We would also need to manage any impact on the Council’s other activities (like planning or customer services)
• Stranded costs: Some costs that are currently shared with water services may not be able to be transferred to the organisation, meaning the Council could be left with some ongoing obligations
• Risk of loss of expertise in rural water supplies: The Council operates six rural water schemes, which have unique requirements and serve a mix of uses. This specialist expertise could be lost if responsibility for water services is transferred to a larger organisation with a greater focus on urban areas.
• Risk of the Council being less effective: There is a risk that the transfer of water services staff and assets could weaken the Council’s ability to function effectively

Option 1 (Preferred option) - Internal Water Services Unit

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