Councillors voted in favour of the recommendation from its three waters project group at their meeting on Tuesday after considering information on environmental and operational benefits and financial modelling for six options.
Three waters transition manager Kathryn Stewart said a three-way CCO between Whanganui, Rangitīkei and Ruapehu district councils offered advantages including maintaining almost the same cost to Whanganui ratepayers over a 10-year period.
“Because we’ve done a good job in the past, we don’t get immediate financial savings, but it won’t cost us more,” Stewart said.
The three-way CCO would provide greater financial resilience and distribute new costs in the future among a larger number of ratepayers, allow decision-making to be kept within the Whanganui River catchment area, retain skilled Whanganui jobs and allow a greater focus on compliance monitoring.
Councillor Rob Vinsen asked how much debt would be transferred by Ruapehu and Rangitīkei councils to a joint CCO, saying he was concerned that Whanganui ratepayers could be “bailing out” the other two councils.
Drawing on information from each of the councils’ Long-Term Plans, Stewart said total waters debt was around $90 million for Whanganui, which has about 18,000 residential ratepayers, and $40m for both Ruapehu and Rangitīkei, which each have around 5000 residential ratepayers.
Chief executive David Langford said updated figures would be sought.
Councillor Josh Chandulal-Mackay said the proposal allowed the council to team up with councils that had similar interests, particularly around the Te Awa Tupua and Whanganui River catchment.
“[It] also enables us to access greater borrowing rates. The number is 500% as opposed to the 280% that we’re able to access at the moment.”
That meant the neighbouring councils would be able to access the significant investments they require.
“But equally, in terms of cross-subsidisation and that concern, we need to remember that there will come a time in future where Whanganui also requires significant investment and this new model will enable us to achieve that far more effectively than going it alone.”
Mayor Andrew Tripe said he fully supported a three-way CCO with Ruapehu and Rangitīkei.
“It does make sense that our preferred option for consultation is the three-council delivery model as it brings an opportunity for collaboration beyond Local Water Done Well.
“Joining up with our neighbours brings the most benefits and best equips the district to meet future challenges and continue to invest well in the medium to longer term in a way that is affordable for our ratepayers.
“Our Long-Term Plan consultation this year showed that investment in water infrastructure continues to be a key priority for our community, alongside affordability.”
Tripe said the council was looking forward to community feedback through the consultation process and no decision would be made until it had heard from the community.
Under the legislation (the Water Services Preliminary Arrangements Act 2024), councils are legally required to develop, adopt and submit a Water Services Delivery Plan (WSDP) to the Government by September 2025.
Councillors considered several options, including keeping Whanganui water services delivery in-house, setting up a single CCO or a multi-council CCO with one or more neighbouring councils from across the Manawatū-Whanganui region (Rangitīkei, Ruapehu, Manawatū, Horowhenua and Tararua district councils and Palmerston North City Council).
The options were evaluated on how well they met several key objectives.
These included affordability, long-term financial sustainability and ensuring continued support for a growing and resilient district.
The options were also assessed on their ability to meet consenting obligations and provide opportunities for local input, allowing communities to shape priorities that are important to them.
Langford said one of the strengths of the three-council model was that it could take a whole-of-catchment approach to the Whanganui and Whangaehu awa.
“A single focus on water infrastructure and the better financing tools means a longer-term approach can also be taken to delivery and investment,” Langford said.
LDR is local body journalism co-funded by RNZ and NZ On Air.
