The Selwyn waste water treatment plant stays in the hands of locals under the new plan, says the mayor. Photo: RNZ / Nate McKinnon
Selwyn District Council has become the first in the country to establish a company to manage water and wastewater.
Selwyn Water Limited was set up at a cost of $2 million under the government's Local Water Done Well legislation, which let councils create entities that could borrow more than councils were able to on their own.
It would provide drinking and wastewater services to about 30,000 households and more than 8000 businesses.
Selwyn Mayor Sam Broughton was joined by Local Government Minister Simon Watts and Selwyn MP Nicola Grigg at a formal launch event at the Pines Wastewater Treatment Plant on Tuesday.
Photo: RNZ / Nate McKinnon
Broughton said it was a milestone for the district and would future-proof its water infrastructure.
"A stand-alone CCO [council controlled organisation] to manage our water and wastewater means we have continued local ownership, prevents the privatisation of our water assets, it means we think about a long-term future and brings in governance excellence to the management of our water," he said.
The council voted for the model in April, despite about 87 percent of 424 public submissions against the proposal and in favour of keeping water services in-house.
Rolleston Residents Association chair Mark Alexander said the council rushed the plan through.
"There is a great deal of anger and upset in the community that submissions were ignored," he said.
"The creation of the company imposes significant costs on the ratepayer. There's the cost of creating the company, creating a board, paying a board, transferring and hiring of staff that gives no creator no functionally to the water services than there would've been if council did it in house."
Broughton said public conerns about potential higher costs and reduced local control had been addressed.
"We take all community feedback really seriously, we had hearings, we had people come and talk to us about what they had written down and during that process it became really clear the community congratulated us as a district for the investment that had already been made and that was part of the reason; 'why change it because you're already successful now'," he said.
"Another key factor was that people were scared of privatisation, so we've made sure that has been dealt with too and the primary legislation meant that that couldn't happen as well. The continued local ownership and influence for the community is also taken account in the set-up because this isn't a separation for the community. Selwyn Water will continue to hear from our community to be a part of future decisions."
Photo: RNZ / Nate McKinnon
Water charges were expected to be higher for ratepayers initially because of set up costs but cheaper after about 10 years.
"We put aside $2 million to set up the CCO and that has been paid for and some of that will be repaid through water charges. Our water charges in Selwyn have always been separate from rates and capital values of properties so that will continue with the new organisation being set up," Broughton said.
"Anything we do with water needs to be done sensibly and thinking not just about today but for the generations to come as well."
An average 14.2 per cent rates rise took effect for Selwyn ratepayers from July.
The council said an in-house model would limit its ability to borrow for large-scale infrastructure projects needed to support Selwyn's rapid growth.
Photo: RNZ / Nate McKinnon
The CCO had the ability to borrow up to 500 percent of its revenue through the Local Government Funding Agency, compared to the 280 percent cap for councils managing water in-house, it said.
Local Government Minister Simon Watts said the launch of Selwyn district's water service entity marked a significant milestone of water reform.
The council was the the first to get its plan approved by the government ahead of the national deadline on 3 September.
"I look forward to seeing similar Local Water Done Well plans progress in the coming months," Watts said.
"Selwyn District has demonstrated it has a financially sustainable plan for the delivery of water services that meet health, quality, and environmental standards, along with community expectations.
"I will be watching with interest how Selwyn Water manages the projected price increases for consumers during the initial years of their plan. I expect the Commerce Commission, as the economic regulator, will closely monitor to ensure the delivery of forecast levels of capital investment, justify the price."
Over the next six months, the council would transfer relevant assets, staff, and systems to Selwyn Water. Stormwater services would remain managed in-house by the council.
Photo: RNZ / Nate McKinnon
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