Waikato District Council news
Another Waikato water option in wings
Waikato District Council is holding informal discussions with Watercare Services Ltd and WaikatoTainui on potentially forming a company to improve water and wastewater services for the district.
But Mayor Allan Sanson says talks are only at an early stage with other options to manage water
services still “very much on the table”.
The Council already works with Watercare in Pokeno and Tuakau. The Auckland Council-owned
Watercare – a CCO – has treated wastewater as well as supplied drinking water to Waikato district ratepayers for many years. Watercare contractors also provide specialist technical expertise to the northern part of the district. Council often struggles to find enough expert staff to keep up with growth and increasing health and environmental standards.
Mayor Allan Sanson said it might make “financial and common sense” for the three organisations to look at leveraging their existing relationships. His Council had worked closely with both organisations for years on water issues, he said.
“We all want the same thing. We all want a healthy Waikato River and healthy waterways but in away that’s affordable for people in our district. And we want to deliver the best water and wastewater services we can for the best possible price.”
Three-party discussions began when it became clear neither Hamilton City nor Waipa District
Councils supported forming a joint asset-owning CCO to manage water as independently
recommended. Waipa and Hamilton want a non-asset owning model.
“We respect that each Council will do what it thinks is in the best interests of its own ratepayers and we’ve certainly not closed the door on any option, including the Hamilton/Waipa option,” Sanson said.
“But recent issues at Havelock have highlighted that local government, in general, must do a better job with specialist water and wastewater issues – it’s that simple and my Council is no different. We’ve got some very obvious challenges here so let’s face up to them and consider the best option for our ratepayers going forward.”
Sanson said there could be a range of benefits from the Council forming a separate waters company with potential support from Waikato-Tainui and Watercare.
“If a realistic option does emerge we’ll share it with our community so we can compare it to the
other options on the table, including the status quo. And of course Watercare, Auckland Council and Waikato-Tainui would also need to consider whether they want to change the current working arrangements. Discussions at that level have not been held.”
Sanson said no decisions would be made until the public was consulted and that was a way off yet. “We’re keeping our options open but we’re strongly committed to improving the way we provide water and wastewater services, that’s for sure. In the meantime it’s business as usual.”
Options for water and wastewater management – Q&As
1. Why is WDC considering a change to way it provides water and wastewater services?
We have an absolute obligation to provide the best and most cost-effective water
and waste services to our community. That is the law. For some time, we have been
considering how we can provide water and wastewater services in a better way. The
Council has considered a number of options over a number of years.
More recently it has become clear (particularly given the issues at Havelock North)
that all Councils will be required to meet higher and higher standards in the future –
in terms of both drinking water standards and waste water disposal. We support
that. Our priority is keep our people safe and protecting our environment in a way
that’s affordable. But those higher standards will come at a cost to our ratepayers.
As a smaller Council, Waikato District has some particular challenges. We are spread
over a very large geographical area yet are experiencing huge growth. As an
example, we have nine wastewater treatment plants, 78 pump stations and more
than 290 kilometres of pipework to maintain.
Yet given the number of rural landowners, just over one third of our residents are
connected to Council’s water supply. This puts a large financial burden to pay for
services on a small number of ratepayers. As standards for water and wastewater
get higher, that burden will increase.
While we have great staff, our Council (like many Councils) is also struggling to
recruit and retain the expertise we need to run our water and wastewater services
to the standards now demanded. We are heavily reliant on outside consultants for
help – and that comes at a cost.
It is clear that, on its own, Waikato District Council cannot provide the kinds of water
and wastewater services our communities will need and should expect in the future.
We cannot ignore this issue. We must to do something differently.
2. Why would Waikato District consider forming a company with Watercare and
Waikato-Tainui?
Waikato District Council is strongly committed to improving the way it provides
water and wastewater services. The Council has worked closely with Watercare for
some time (see question 6) and our district and ratepayers have benefited from that
relationship.
Waikato-Tainui is a co-governance partner for Waikato District Council, particularly
in relation to issues which impact on the Waikato River. It is entirely right Waikato-
Tainui be included in discussions about water and wastewater, particularly given
Waikato-Tainui’s interest and expertise in river restoration.
While there is still work to do, initial investigations indicate it may make sense for
the Council to expand its existing relationship with Watercare and to continue
working alongside Waikato-Tainui around securing the best environmental
outcomes. The early investigations suggest that, by doing so, Waikato District
Council, on behalf of its ratepayers would:
– Have access to world-class expertise in water and wastewater (via Watercare)
that we simply could not afford on our own
– Be able to build a far more resilient and stronger waters network across our
district. This is particularly important given the growth we already facing.
– Be able to meet more stringent drinking water and environmental standards
– Get significant financial savings from joint procurement and cost-efficiencies
– Be able to attract and retain expert waters staff prepared to work in our district
for a specialist waters company
– Have ready access to the resources and expertise available within Watercare and
within Waikato-Tainui
– Be able to maximise the use of water for the district’s economic growth.
– Get the advice and expertise of experienced, independent directors whose sole
focus would be on ensuring our district has the most efficient and cost-effective
water and waste water services.
3. Has a decision to form a company to manage water been made?
No. And any decision would still be some time away.
We have said for some time that we are discussing a possible expansion of our
existing relationship with Watercare in order to improve the way we provide water
and wastewater services. Those discussions also include Waikato-Tainui.
But there is still considerable work to do yet before any kind of formal business case
and potential new model is put in front of Council.
4. When will a business case be complete?
The Council is likely to formally consider this issue in mid-August.
5. Has Waikato District Council discounted the non-asset owning model Hamilton and
Waipa want?
No. We acknowledge Waipa and Hamilton favour a non-asset owning CCO. Each
Council will do what’s in the best interests of its own ratepayers. Our position
remains the same; we consider an asset-owning CCO the best option for our district.
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That position is consistent with professional advice offered over a number of years
from a range of experts.
However Waikato District Council has not closed the door on any option and will not
do so until more information is available and until the business case involving
Watercare and Waikato-Tainui is complete. The Council will continue discussions
with Waipa and Hamilton about their proposal to form a non-asset owning CCO. It
will also consider investigating ways to work more closely with Watercare and
Waikato-Tainui.
6. How long has WDC had a relationship with Watercare?
Waikato District Council has worked closely with Watercare since 2010 when it
began providing wastewater services to the people of Tuakau and Pokeno. Since
2015 Watercare has also provided drinking water to both of those communities,
under contract to Waikato District Council.
Watercare, through its service provider CityCare, already provides maintenance
services for the north of the Waikato District.
In addition, Waikato District Council and Watercare have worked closely together on
technical issues for a number of years. In some instances Watercare has provided
resourcing and advice and well as technical expertise to the Council.
It is a long-standing and positive relationship that has benefited Waikato District
Council and its ratepayers.
7. Why could Waikato District Council not provide these itself?
It could – but it simply wouldn’t make economic or common sense.
Waikato DC has no wastewater plant to service Tuakau and Pokeno; the existing
plant is owned and managed by Watercare, following a government decision made
when the Auckland ‘Super’ Council was established. It would make absolutely no
sense to build another plant when one is already there. It is most cost-effective for
Waikato District ratepayers to share this resource.
Similarly, because it has infrastructure in place, Watercare can provide drinking
water to Tuakau and Pokeno far more cheaply than Waikato District Council could
supply it to those communities itself. Watercare can also provide maintenance
services more cheaply simply because it is a bigger, better-resourced organisation
that specialises in water services and nothing else.
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Waikato District Council simply does not have the scale or resources available inhouse
to always provide the best service at the cheapest cost. Watercare is able to
provide these services more effectively and cost-efficiently to the Council and these
savings benefit all ratepayers.
8. What relationship does Waikato DC have with Waikato-Tainui?
A very positive and long-standing one. Waikato-Tainui is a key co-governance
partner for Waikato District Council. It is entirely right Waikato-Tainui be included in
discussions about major issues which impact on the Waikato River – as the issue of
water and wastewater does.
Waikato-Tainui also has expertise in regards to environmental and other issues and
that is very helpful to Waikato District Council.
9. Why might Watercare want to be involved in this company?
Watercare already provides water and wastewater services to Waikato District
Council and has for some time. Watercare also takes water from the Waikato River
and, like Waikato-Tainui and Waikato District Council, has a very clear interest in
seeing the health of the river restored. In those respects, Watercare already has
common interests in, and is part of, the Waikato community.
Watercare, as New Zealand’s largest water company, also has significant technical
and operational experience and expertise not always available to smaller
organisations. It already shares that expertise with Waikato District Council and also
works closely with Waikato-Tainui in a range of areas. It has for some time.
Watercare, as New Zealand’s largest water company, believes it has an obligation to
work across boundaries and alongside other water providers to improve the
standard of water and wastewater services in New Zealand. New Zealand’s health,
social, environmental and economic success relies on water and on making best use
of this raw economic resource.
Waikato District Council asked Watercare to join with the Council and WaikatoTainui
in investigating a potential change to the existing relationship between the
three partners; it was not something actively sought by Watercare. Potential
opportunities are now being investigated but any decision to form a company, or
alter the relationship in any other way, will be a decision for Waikato District to lead
and to make.
Before Watercare sought to make any change to the current arrangements, it would
also need consider the needs of its own stakeholders, including Watercare’s
shareholder, Auckland Council.
10. Why might Waikato-Tainui want to be involved in this company?
Waikato-Tainui is a co-governance partner with Waikato District Council and is
always included in discussions about major issues to do with the Waikato River. This
issue no different.
Waikato-Tainui has had a Joint Management Agreement with Waikato District
Council since 2010 and also has a long-standing relationship with Watercare. This is
reflected in a Watercare/Waikato-Tainui Memorandum of Relationship signed in
1998.
In effect, the tribe has been involved in water and wastewater matters with Waikato
District Council and Watercare for many years.
Waikato-Tainui’s aim is to ensure the restoration and protection of all waterways.
The tribe shares the Council’s aim; it wants to see an improvement in environmental
outcomes across the district, and in a way that is cost-effective and affordable.
This is particularly important to Waikato-Tainui given the majority of tribal
membership, who are also ratepayers, live in the Waikato district. Waikato-Tainui
works, on their behalf, to provide the best possible outcomes – environmentally,
culturally, socially and economically. Continuing discussions about a potential new
way to deliver services is simply part of that.
11. Will Watercare/W-Tainui have shares in the company and if so, how would it work.
Work is still underway on how exactly a CCO involving the three organisations might
work. It is early days. There are still a large number of issues being worked through.
12. Is the model being considered an asset owning CCO?
Yes. However, we will assess whatever model emerges against the non-asset owning
model already supported by Waipa District and Hamilton City Council. Both options
are still very much on the table.
13. What would happen in regards to stormwater?
Under the model being investigated, stormwater services would be provided by the
CCO under contract to Waikato District Council. It’s likely the Council would retain
responsibility for stormwater planning.
14. If the Council was to form a CCO, would there be a separate Board and CEO?
Yes.
15. Would Watercare and Waikato-Tainui have seats on the Board?
No decision on that has been made. A range of options are still being considered as
part of the investigation.
16. What role – if any – would Tainui Group Holdings have in this company?
None. Waikato District Council has not had any discussions with Tainui Group
Holdings about this issue.
17. Does this have anything to do with water allocation?
No. We simply want to provide the most cost-efficient and effective management of
water and wastewater for Waikato District ratepayers.
18. Is Auckland Council aware of these discussions.
Yes. Waikato District Council already works closely with Auckland Council on a range
of cross-boundary issues like transport, growth and environmental planning.
Auckland Council has been kept informed of discussions, noting no decisions have
been made.
19. How long have you been working on this proposal?
In May 2015, an independent report was presented to Waikato District, Hamilton
City and Waipa District Councils which recommended the three councils form a
Council-controlled organisation to manage water and wastewater. All three councils
initially supported this model but this changed after the local government elections
in October 2016.
Waikato District Council’s position has not changed; it considers an asset-owning
CCO the best option for our district and for the wider region. That position is
consistent with professional advice from a number of experts over a number of
years.
Hamilton City and Waipa District Councils now both support a non-asset owning CCO
to manage water and wastewater. While that model will also be considered by
Waikato District, we will also consider an option which sees an expanded
relationship with Watercare and Waikato-Tainui. Each Council will do what’s in the
best interests of its own ratepayers.
20. If a water and waste water company was formed, would it cover over the whole
Waikato district?
Yes, that is what is being discussed. But no decision has been made.
21. Who is doing the business case?
Senior Waikato District Council, Waikato-Tainui and Watercare staff as well as some
specialist advisors when required (legal etc). When complete, the business case will
be independently peer reviewed.
22. What has the business case cost Waikato District Council?
There is a budget of $103,000 for this work.