Under this option, we would continue to manage and deliver water services on our own, without partnering with other councils. We would be fully responsible for all day-to-day operations, maintenance, planning for future water needs, and repaying any water-related debt.

Our mixed-use rural water schemes operate very differently to conventional urban schemes and require both specialist operational and technical knowledge. The appointment of independent experts to the Water Services Committee will ensure these needs are met.

To help meet new government requirements, we would set up a dedicated water services delivery unit within the Council.

We could share certain services with neighbouring councils or contract some operations to an external water services organisation. However, that may not provide the same cost savings as being part of a joint water services organisation.

We consider this the best option for the 10-year period, however, this may not be the long-term case, after which the community may need to revisit its future options to join with another water services organisation (or not).

Council will need to work closely with Timaru District Council and Mackenzie District Council in relation to the operation of the Downlands Rural Water Supply for inclusion in the Water Services Delivery Plan.

Key advantages

• Local decision-making: Our Council, which is familiar with local conditions, would decide on services and investments
• Seamless integration: Water services can be easily coordinated with our other responsibilities (such as district planning and roading)
• Community accountability: Communication with our community would continue to be straightforward, with us engaging directly with residents on water issues.
• Familiar structure: Day-to-day operations would continue largely as they are now, which can help minimise transition costs and confusion.
• Continuity for rural supplies: Continues existing management and operating arrangements for rural water schemes
• Opportunity to share services: We could share services with neighbouring water organisations to try to reduce costs or contract a water organisation to deliver services
• Opportunity to review pricing structure: We could look to review the current pricing structure and explore better ways to share costs among our urban and rural customers. An option is to look at a combination of set charges and other charges based on water use that suit our customer base to ensure affordability is managed
• Local knowledge: We would have control over how the unit is resourced, with more likelihood of retaining skilled staff with local knowledge

Key disadvantages

• Longer-term challenges need to be funded: We would need to fund major water infrastructure investment over the next 15 to 30 years, and those costs are likely to become more expensive over time. This could require substantial borrowing and limit our ability to invest in other important areas like roads, parks, and recreation
• Increasing requirements: We would need to meet tougher Government regulations on our own, and this could lead to higher rates or more borrowing
• Limited opportunity for efficiencies: We would not benefit from economies of scale that might come from partnering with other councils, potentially increasing our long-term operating costs
• Competition for staff and contractors with larger water organisations which may be more attractive

Option 2 - Three-council Water Services Organisation

Click below to make a submission:

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

Click below to make a submission