Joint waters company

Currently, working across council boundaries is complex and time-consuming. Having to deal with cross-boundary issues holds up vital infrastructure and adds costs. By joining together, Hamilton City and Waikato District can build the infrastructure our growing communities need, faster and cheaper. This would help unlock housing and industrial development, and would allow both councils to meet their growth obligations (including housing obligations) to the government. 

The Waikato River has huge cultural, recreational and environmental significance to all of us. We all want a clean and healthy river. To Waikato-Tainui the River is a single, indivisible being. It is a tupuna which has mana and represents the mana and mauri of Waikato-Tainui.

Forming a CCO with Waikato District would enable better management of the river. The CCO would take freshwater and discharge treated wastewater from a much longer (150km) stretch of the waterway.

This better supports our obligations to Te Ture Whaimana o Te Awa o Waikato (the Vision and Strategy for the Waikato River). It would also allow us to better respond to waters standards set by the Waikato Regional Council and Taumata Arowai (the national waters services regulator).

The government has changed the rules to give CCOs greater borrowing power than councils. In other words, a CCO can borrow more than a council can. That means costs could be spread more fairly, over a longer period of time. Instead of having to pay off a loan in 30 years, for example, that loan could be spread across a period more closely aligned to the full life of the infrastructure. This would reduce the burden on today’s ratepayers because future ratepayers, who would also use the infrastructure and services, would also pay their fair share. 

In the case of a natural disaster, critical infrastructure could be rebuilt or repaired faster, because the CCO would have access to more funding. 

The joint CCO, working for both the city and Waikato District, would service many more households and businesses. It would be a more cost-efficient organisation, solely focused on waters with greater purchasing power for waters services. 

Over time those savings and operational efficiencies would be passed to ratepayers. This has been the case around the world, including in Auckland where a CCO (Watercare) has been responsible for waters services since 1991. 

New Zealand has a shortage of waters specialists and our waters workforce is ageing. We need more skilled people. Affected waters staff at both councils would transfer to the CCO. A larger waters organisation is more likely to attract and retain the specialist staff we need to keep our water infrastructure working well. 

Hamilton’s costs to establish the CCO are estimated at $6 million. Costs would be debt-funded by each Council and the debt would then be transferred off Council’s books to the CCO. The set-up costs would be offset by increased efficiencies over time. 

A CCO would be governed by a group of appropriately skilled, independent directors with the right mix of expertise to make critical decisions about long-term, critical infrastructure. Both councils, along with Waikato Tainui, would appoint the directors. 

Under this option the Commerce Commission would provide oversight to ensure the CCO is well managed financially and meets its legal obligations in terms of waters charges. Taumata Arowai already requires councils to meet their water quality obligations, and it would require the same thing of a CCO. The CCO would have a direct relationship with Waikato Regional Council in terms of resource consents and compliance. 

Both Hamilton City Council and Waikato District Council want to leave the door wide open for other councils to collaborate and potentially merge with the CCO, if that is what those councils choose. The CCO has been designed to make future mergers as simple as possible. Adding other Councils would create a larger organisation that could further reduce costs, increase efficiencies and enable access to more expertise. Right now, some councils are not ready to take this step. But Hamilton and Waikato District have significant growth and funding challenges and need to get on and build infrastructure, in the most affordable way. 

Hamilton City Council and Waikato District Council both very seriously considered joining some other Waikato councils that are consulting on forming a CCO.

Specific growth challenges and important funding opportunities mean that is not the best option for our communities, at this time. However, both Hamilton City and Waikato District Councils remain very keen to work with other councils in the future to collaborate on water services.

The door remains wide open to regional co-operation.