Forming an in-house business unit

The business unit would be separated financially from the rest of the Council and would still be required to generate revenue through separate targeted rates and waters charges. It would need to produce stand-alone financials, a separate waters annual report and a separate waters services strategy (like a long-term plan for waters). This would help meet government requirements for greater financial transparency. 

An in-house business unit would not have as much borrowing capacity as a CCO. Because it could not borrow the money needed, Council could not afford to do all of the waters projects needed to respond to growth in the city. There would have to be trade-offs. Some projects, not just for waters, would be delayed or possibly cancelled, and our ability to respond to emergencies would be reduced. Current ratepayers would end up paying more than their fair share because the debt is not shared as much with future generations. 

Under this option, Hamilton City Council would struggle to meet its growth obligations to the government. This option would not be able to support those projects in the city and wider region the government wants to see fast-tracked. 

Existing rules and laws make it complex to work across council boundaries. This option does not easily enable joined-up planning, funding, delivery and operation of waters infrastructure. It would mean Hamilton would continue to operate as a ‘stand-alone’ entity instead of joining with Waikato District (and potentially other councils over time) to work together and more efficiently build and maintain major waters projects. This would adversely impact growth around Hamilton that requires joined up solutions with Waikato District. For example, it could potentially impact projects like the much-needed Southern Wastewater Treatment Plant. 

This option does not offer the same advantages as a bigger organisation because in reality, nothing much changes. Hamilton would not increase its purchasing power, or be able to call on more resources. It does not take advantage of changes made by the government to help New Zealand build better waters infrastructure, faster. 

The health of the Waikato River would continue to be a priority. But under this option, Hamilton City Council would only be able to influence 16km of the waterway (compared to 150km if a joint CCO was formed). 

It would be cheaper to establish an in- house business unit than setting up a CCO. But the long-term benefits of a CCO would outweigh this because, over time, a CCO would deliver cost-efficiencies. 

Under this option the Commerce Commission would continue to provide oversight to ensure Hamilton City Council meets its legal obligations in terms of waters charges. Taumata Arowai would ensure the in-house business unit meets all water quality obligations.