Rotorua will enter into a 10-year, $156 million contract with Trility to outsource its management of wastewater services.
The decision was made at a meeting of the Rotorua Lakes Council on Wednesday, with seven councillors in favour and four against.
Up to 45 people packed the public gallery for the decision.
Infrastructure manager Stavros Michael took councillors through a lengthy presentation explaining the history and rationale for the proposal, refuting the word "outsourcing" for neologism "insourcing".
He said the proposal was the product of a long process and directly addressed an expert's statements that the decision had been "in haste".
Michael said it was "unaffordable" and "impossible" to find $200m to "capture the lost ground" on sewerage infrastructure.
"We have to make sure that … we have systems and processes in place and incentivise good risk management.
"There's no point of actually tasking people to do it unless the people are going to do their work and they have skin in the game and they fear that if they don't do it properly, they will suffer the financial consequences of that."
He suggested a fixed contract with Trility would ensure stabilisation of projected rising costs which have been forecast due to the poor state of the network
Michael's presentation indicated asset ownership, control and "community connection" would stay with the council.
"What we do now is dumb outsourcing … in totality, about 87 per cent now of all the costs of the wastewater services is provided by external parties.
"When I call it a dumb system, is that for the amount of money we spend into this activity … each of these tasks is purchased on its own merit, none of these dozens of contractors we use at the moment has the responsibility of overall performance of the network.
"All the responsibility in statutory compliance and performance risks rests with the council.
"If you're going to spend $14 or $15m to manage an activity of increasing costs, is that the smartest way to buy the service …?"
Michael said the recommendation proposed to "insource" specialist and technical advice that had buy-in to the overall performance of the wastewater service delivery.
It was a "joint partnering" to make sure there was an optimum system, with a party that was prepared to put "skin in the game", he said.
Mayor Steve Chadwick, who was also chairwoman of the meeting, moved the motion to enter into the contract.
It was time for the community to "get certainty" in the area, calling it a "critical decision", she said.
"I am very tired of the discussion of this being us as a council abrogating our responsibility and flicking this out to a private consortia that take the profits offshore.
"That's what I've heard from many that wrote to us, from the phone calls that we've listened to.
"We are not contracting out.
"This is a way for us to collaborate with iwi, with major consortia that can help us with our infrastructure management, and also help us with a partnership agreement with central government."
She said it was not a time for councillors to "sit on [their] hands".
"If you keep things the same, as they are, you will get the same results."
Mayor Steve Chadwick: "To not make a decision you're risking our infrastructure and agreeing to keep that very high level of risk … for me it is not defensible and it is irresponsible."
Deputy mayor Dave Donaldson: "I don't make decisions in an environment of imagined scenarios, I am interested in data and due diligence. Public consultation is not a referendum, so it is our job to get to the truth of the matter and make appropriate decisions. This proposal is about managing risk. It's a risk that the council can't afford to shoulder alone.
Tania Tapsell: "I was pleased to see further information around the contract which I was concerned about. It's quite clear that our previous model didn't work … for the case of having some experts in there to look after the service delivery but council still maintaining the assets, the planning, the funding and managing the performance, I do support what's proposed."
Trevor Maxwell: "I'm even more convinced that this is the right decision for Rotorua Lakes Council to make, our chance to be courageous and ignore the misinformation we councillors have been bombarded with. Thankfully my delete button worked over-time for me. We have neglected wastewater services for too long, time for positive action."
Fisher Wang: "After talking to Stavros [Michael] and those involved, I spent a considerable amount of time reading and analysing the information presented to me. I see this as an investment in our future."
Mercia Yates: "This hasn't been an easy decision. To decipher between the repetitive rhetoric that I have been inundated with over the last few months has been indeed concerning. Mana whenua is a significant partner. I look forward to this 10-year partnership and especially the innovation that will come from it."
Merepeka Raukawa-Tait: "Good, fearless leadership has never been a popularity contest. We do know that we are representing all of our citizens in Rotorua. Not just the uptown folks. I am well satisfied. I will be doing today what I think is necessary to make sure that we are considering everyone in our community, that we are making decisions that will look to the long term as well.
Reynold Macpherson: "It would ... be premature and contrary to the interests of ratepayers for elected members to approve [the proposal]."
Peter Bentley: "We should still wait for the Three Waters presentation from [the Government]. I will not be supporting it."
Sandra Kai Fong: "I still have some doubts and I go back to the Office of the Auditor General's recommendation [on a report into the Mangawhai sewerage scheme] that you have to have the courage to keep asking the questions until you yourself feel comfortable and for me, I totally support a strategy around continuing to invest in our infrastructure … but for me, I have to stand by my original decision and I do not support the recommendation."
Raj Kumar: "I'm not supporting this motion. We are now trying to fast-track through a hard-sell through a pledge we've made to Trility. If something is too good to be true it probably will be. Outsourcing has now been given a new name, but that doesn't change the fact whether you dress a pig up with lipstick it's always going to be a pig."