Another option for delivering future water services involves the development of a Napier City Council Controlled Organisation (CCO).
Like our preferred option, this option requires a new CCO being established, but just for Napier. This organisation would be responsible for delivering water supply (drinking water), wastewater and stormwater services to Napier communities only, managing approximately 28,000 water connections. It would build, maintain and operate critical waters infrastructure, based on strategic direction from the council shareholder.
While many of the key features to note about this model are the same as that of a regional CCO, in this instance the organisation would be 100%-owned by Napier City Council. This means Council would have more influence over the CCO as the only shareholder. It would also be solely responsible for developing a full transition plan to support the transition and implementation of this option.
Another key difference between this and Option 1 is Option 2 does not create the scale and efficiencies that come from a regional model. This means we wouldn’t benefit from some of the potential savings outlined under Option 1 and attracting the required specialist skills and expertise could be more difficult.
Similar to Option 1, ownership of water assets (and all associated debt and liabilities) would transfer to the organisation, meaning it would be able to borrow money for water investment and construction (capital costs) separate from council borrowing in other areas.
This means the water debt could exceed current limits for councils. While the CCO’s debt won’t be added back to the Council’s debt, credit rating agencies will still consider both water and nonwater debt together when evaluating the Council’s financial position.
As with Option 1, a Long Term Plan amendment would be required to transfer Napier’s water assets to the new water services CCO.
Our modelling shows this is not the most affordable way to deliver water services for our communities in the future. By 2034 ratepayers could expect to pay $300 more per year for water services delivery compared to a multi-council CCO model but relatively similar costs to the in-house delivery model.
The CCO would be responsible for managing and paying for all water services, including collecting water rates. Ownership of water-related assets (and any related debt) would be transferred to the new CCO. This is similar to a regional delivery model however borrowing costs will be higher given stricter lending criteria from LGFA, e.g. higher costs to community.
Who owns the water assets?
Under this option, the assets for water and wastewater would be owned by the water organisation. Council will be the 100% owner of the water organisation.
Who makes decisions?Â
The board of the water organisation, but this would be informed by the Statement of Expectations from the shareholding council.
Iwi involvement
The important role of Iwi/Hapū still needs to be confirmed and agreed to with Iwi/Hapū and the council.
We've provided a number of ways for people to have their say on Napier's Local Water Done Well consultation. Submissions close at 5pm, Sunday 15 June.
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