This means residents will be charged only for the cost-of-service delivery in their own district, while still benefiting from a share of the savings gained through scale.
Whanganui was the last among neighbouring authorities to choose a delivery model.
At a meeting on Tuesday, councillors debated balancing cost efficiencies gained in a larger grouping with the opportunity for local voice and the council’s obligations to Te Awa Tupua legislation.
Following the decisions of other councils, Whanganui weighed up four options: a two-council CCO owned by Whanganui and Ruapehu district councils; a single council CCO owned by Whanganui District Council; a multi-council CCO owned by Whanganui, Rangitīkei, Horowhenua district councils and Palmerston North City Council, with the door open for Ruapehu; continuing with a standalone in-house business unit.
Council staff recommended a joint entity with Ruapehu.
The council’s Local Water Done Well transition manager, Kathryn Stewart, said the joint models were projected to outperform an in-house business unit.
The two-council model would save water users an estimated $620 a year or $18,000 over a 30-year period.
A five-council model would deliver customer savings of $870 a year.
Chief executive David Langford told councillors that cost efficiency modelling did not set precise savings but was a mechanism for comparing options.
“The numbers are there to help you compare options, they’re not predictions for the future. Hanging your hopes on exactly $620 per year for 30 years is an erroneous use of the model.”
Langford said joining a bigger grouping of councils would likely provide greater savings for households but “bigger is better” was a misnomer.
He cautioned councillors against making a decision on cost savings alone.
“It’s not cost efficiency at any cost. As you get bigger, your ability to influence and the size of your voice gets smaller. [It is] a trade-off between how much you make in savings and how much voice you retain.”
Much consideration had been given to Te Awa Tupua legislation, Langford said.
The two-council model with Ruapehu would create a water service delivery entity that was exclusively focused on the Whanganui catchment.
It would ensure governance remained close to the community and was not consumed by a larger entity.
Stewart said all joint options would bring opportunity, including increased collaboration, resilience, and staff and technical capacity.
But the two-council model would also preserve local voice and influence and put Te Awa Tupua and the wellbeing “of all our connected communities” at the centre of decision-making.
The CCO would manage the delivery of water services for about 24,000 connections.
The councils would appoint a board of independent, professional directors who would be responsible for making decisions. The board would be informed by expectations set out and agreed upon by the two councils.
Advantages included improved ability to fund infrastructure investment, maintenance and compliance costs and improved environmental outcomes, and greater ability to respond to emergencies, manage risks and adapt to future challenges like climate change.
In favour of the two-council partnership were Tripe, Glenda Brown, Josh Chandulal-Mackay, Jenny Duncan, Ross Fallen, Kate Joblin, Charlotte Melser, Peter Oskam. Against were Deputy Mayor Helen Craig, Charlie Anderson, Philippa Baker-Hogan, Michael Law and Rob Vinsen.
The Ruapehu council voted 6-4 in favour of the two-council model last week.
Chief executive Clive Manley welcomed Whanganui’s decision and said it was an important milestone that enabled both councils to begin work on detailed planning and implementation.
While Whanganui voted to include stormwater in the new CCO, Ruapehu was still considering whether to transfer its stormwater services or retain them in-house. This decision would not affect setting up the new CCO, Manley said.
“We’ll make a decision on stormwater in due course, but it doesn’t prevent us from moving forward with the rest.
“Both councils are committed to continuing to explore opportunities that improve efficiency and reduce costs for our communities.”
Whanganui council officers will now finalise a Water Services Delivery Plan for adoption at the next council meeting in August. The council will then submit its final Water Services Delivery Plan to central government by the early-September deadline. If approved, implementation will begin later this year.
The new water services CCO could be established by mid-2026 and be fully operational by mid-2027.
LDR is local body journalism co-funded by RNZ and NZ On Air.
