Southern water services partnership takes significant step forward

The prospect of three South Island councils joining forces to deliver water services that are financially sustainable and meet ever-increasing regulatory standards took a significant step forward today.

Southern Water Done Well partners, Central Otago District Council and Clutha District Council, have both agreed, in principle, to present a jointly owned Council Controlled Organisation in their Water Services Delivery Plan.

The decision comes two days after Waitaki District Council voted to exit Southern Water Done Well (SWDW) and opt for an in-house business unit. Gore District Council, the remaining SWDW partner, meets on Monday (14 July) to decide its water services delivery model.

Central Otago and Clutha’s support for the joint CCO is subject to further analysis of the advantages and disadvantages of a three-council model, given Waitaki’s departure from SWDW.

High level updated modelling from local government specialists Morrison Low Advisory indicates that the three councils can still achieve savings if they were to enter a joint CCO, albeit at a lower level than had Waitaki remained.

“This suggests that ratepayers of the remaining councils are still likely to be financially better off from the formation of a joint CCO than they would be if services remain in-house,” it says.

Central Otago District Mayor Tamah Alley and Clutha District Mayor Bryan Cadogan acknowledged that further work was needed before a final decision could be made.

Mayor Alley said that with Waitaki choosing an in-house entity instead of a CCO, the remaining councils will now be looking at a new set of analytics and financials.

“So, whilst we have voted for option one today, we need to look over those new numbers before we make our final decision.

“We have read every submission received through the consultation process. We have read all the reports, listened to the multiple experts brought in, and put in the time to really understand every facet of what this means for our wider community and our district as a whole.

“It hasn’t been easy, but we have to make the call that is right for our district for now and into the future, and that option is a joint council controlled organisation.”

Mayor Cadogan said today’s decision was a stepping stone to the future.

“This (the joint CCO) was the only viable and sustainable option available to us. With the other options, we would have run the extreme risk of producing a non-viable water services delivery plan, which would be untenable for our District and the people we have the privilege of serving.”

Mayor Cadogan said he appreciated the concerns raised during the public consultation.

The presentation from Department of Internal Affairs representatives highlighted to him that Clutha District Council actually didn’t have a choice today.

“This has been the most extraordinary and challenging process. I am proud of the councillors for their professionalism and the extreme effort they have put into reaching the right decision for their community.”

Councils will consider updated reports and analysis and make their final decisions at meetings in August. The Government’s Local Water Done Well programme has presented councils throughout the country with one of the most critical decisions they will face in many years.

The legislation aims to tackle New Zealand’s long-standing water infrastructure challenges by enhancing the quality, sustainability, and affordability of water services nationwide.

SWDW councils recently conducted a month-long consultation on water services delivery options to help inform their decision-making for the Water Service Delivery Plan. These options were:

• A jointly owned CCO involving Clutha, Central Otago, Gore and Waitaki district councils (the preferred option),
• A stand-alone CCO, and
• An in-house business unit.

Councils must submit Water Services Delivery Plans to the Department of Internal Affairs by 3 September. These plans need to show how they will deliver water services that meet new water quality and infrastructure standards while being financially sustainable in the long-term.

The Government can reject plans if they do not meet legislative requirements. If it’s not satisfied with a council’s water services delivery proposal, a Crown specialist can be put in place.

The Minister of Local Government, Simon Watts, has stated in a letter to SWDW councils that there would be no time extension to submit a Plan.