Option 3: Joining with neighbouring councils to set up a new water services organisation

Our Water Done Well - The future of water services in Timaru District

Our preferred option would see our Council join with others to form a new water services organisation.

This organisation would handle water services across all participating districts and take on each council’s water-related assets and debt. The Company would be owned jointly by the partner councils.

A professional board of directors, appointed by the councils, would run the organisation day to day. While we and the other shareholding councils could guide the board and continue to make some key decisions, we wouldn’t control every aspect of the organisation’s work.

Over time, we expect this new organisation would bill customers directly for its services, but in the meantime, we expect that councils would continue to collect water revenues through rates bills, similar to how we bill on
behalf of Environment Canterbury.

Estimated costs

this is what ratepayers could expect to pay on average for water (drinking water, stormwater, wastewater) under the proposed option.

2025	2034
$1,500	$1,670

How would our district have a say in a joint water organisation?

If we do decide to join up with others, we will still get to make decisions about how the arrangement could work.

There are ways for us to monitor and direct the organisation to make sure that your water services are being delivered well and that our district’s needs are being met.

This would include:

Appointing the board of directors, jointly with the other councils, so we can make sure the board has the skills and experience we want.

Jointly issuing a Statement of Expectations, to set priorities for the organisation and specify how progress against them would be measured. The Statement would guide the organisation’s decisions and actions, and the organisation would need to give effect to the Statement and report against it.

Requiring regular reporting from the water organisation on how it’s performing, including through an annual report on progress, service standards, and financial performance.

Negotiating a number of additional protections to include in the organisation’s constitution, such as consulting with our community.

Advantages	Disadvantages
Lower prices This option would probably be cheaper than if we continued to deliver water services on our own - potentially reducing costs to customers by around $230 a year by 2034. Speacialist oversight A professional, expert board can make informed decisions and respond quickly to changing needs. Greater capacity A larger combined organisation can hire more specialised staff and manage assets and new projects more efficiently. Delivering our investment plans The organisation would probably adopt the Council’s current investment plans, which have been independently reviewed. These plans may need further investment over the next 10-30 years. Long-term efficiency By combining resources (such as maintenance services) across multiple councils, having a bigger investment need, the organisation can drive down costs over time. Efficient borrowing The organisation can borrow at similar rates to councils but takes a different borrowing approach that makes it easier to invest in the long term in infrastructure and maintain quality standards affordably. Better financial flexibility for the Council With significant water debt removed from its books, the Council can redirect its financial capacity to other priorities as needed.	Less local control We would share decision-making and control with other councils. This decision-making may feel distant to residents in smaller communities. Transition challenges Establishing the new water organisation is a big task, and coordinating the transition of water services, staff and debt could be complicated. We would also need to manage any impact on other council activities (like planning or customer service). Stranded costs Some costs that are currently shared with water services may not be able to be transferred to the organisation meaning the Council could be left with some ongoing obligations. Risk of the council being less effective There is a risk that the transfer of waters staff and assets could weaken the Council’s ability to function effectively.

Advantages

Disadvantages

Lower prices This option would probably be cheaper than if we continued to deliver water services on our own - potentially reducing costs to customers by around $230 a year by 2034.

Speacialist oversight A professional, expert board can make informed decisions and respond quickly to changing needs.

Greater capacity A larger combined organisation can hire more specialised staff and manage assets and new projects more efficiently.

Delivering our investment plans The organisation would probably adopt the Council’s current investment plans, which have been independently reviewed. These plans may need further investment over the next 10-30 years.

Long-term efficiency By combining resources (such as maintenance services) across multiple councils, having a bigger investment need, the organisation can drive down costs over time.

Efficient borrowing The organisation can borrow at similar rates to councils but takes a different borrowing approach that makes it easier to invest in the long term in infrastructure and maintain quality standards affordably.

Better financial flexibility for the Council With significant water debt removed from its books, the Council can redirect its financial capacity to other priorities as needed.

Less local control We would share decision-making and control with other councils. This decision-making may feel distant to residents in smaller communities.

Transition challenges Establishing the new water organisation is a big task, and coordinating the transition of water services, staff and debt could be complicated. We would also need to manage any impact on other council activities (like planning or customer service).

Stranded costs Some costs that are currently shared with water services may not be able to be transferred to the organisation meaning the Council could be left with some ongoing obligations.

Risk of the council being less effective There is a risk that the transfer of waters staff and assets could weaken the Council’s ability to function effectively.

Last updated: 15 May 2025