Study shows Waikato councils should join services

With a headline referring to a potential saving of $468 million over 28 years, the Cranleigh report into Waikato water service delivery options was released in May. Commissioned last year by three Waikato councils – Waipa District, Hamilton City and Waikato District – the purpose of the report was to determine how each council should manage water, wastewater and stormwater services across the sub-region.

Three options were investigated: retaining the status quo with each council running its own operations; boosting shared services into an enhanced shared services model; and forming a council owned council controlled organisation (CCO) to run water services on behalf of all three councils.

The study delivered two key recommendations:

• Councils should transfer their water and wastewater assets into a jointly owned not-for-profit CCO; and
• Councils should retain ownership of their urban stormwater assets, but outsource management of those assets to the CCO on a cost recovery basis.

Six key benefits were identified for the recommended CCO option:

• Lower 3 Waters charges produce savings for Councils and water customers;
• A stronger water network across the whole sub-region (improved resilience);
• Cleaner water and wastewater benefits customers, ratepayers and the environment;
• Attract and retain talented staff;
• Economic development; and
• Centre of excellence available to share expertise with the region.

From here, the three councils have been considering the study. Hamilton City and Waikato District have agreed in principle to form the CCO while Waipa District will decide this month. If Waipa District also agree, the next stage will be a full public consultation.

New Zealand’s National Infrastructure Unit has commended the three councils for their leadership in commissioning and considering the report, saying “Infrastructure discussions can quickly revert to entrenched and traditional views. Taking a long-term view and focusing on the purpose of the infrastructure – delivery of services to the customers – brings a different perspective. This new perspective and different thinking is needed to address the challenges facing the water sector identified in the National Infrastructure Evidence base 2015 refresh.”