The potential for a partnership — sharing some services — will be considered by Dunedin’s councillors next week.
A proposed memorandum of understanding would also need to be considered by the Christchurch City Council, but a spokeswoman said last night it had not yet established a date for this.
The proposal stops short of suggesting a joint entity, such as a water company, be established.
"While the councils are not currently considering a joint entity, their collaborative arrangement is focused on identifying and evaluating the potential benefits of new ways of working, shared expertise and streamlined processes," the draft memorandum said.
"By considering opportunities to work together, the councils’ overall aim is to reduce costs and enhance water services."
The intention would be to manage shared services through contracts, rather than a multi-council entity, the Dunedin City Council said.
The DCC also suggested in its report for councillors other councils could join the arrangement.
The draft memorandum set out a process for investigating the possibility of sharing services.
Initially, a joint working group of staff from the two councils would be set up.
Its members would consider "a wide range of functions or services, such as joint procurement, laboratory services, plans for asset management, infrastructure planning and delivery, water safety, compliance, and performance monitoring", the DCC report said.
There was no agreement yet about scope.
"This will depend on the outcome of the investigation of the possibilities by the joint working group, and each council’s decision on how it wants to proceed beyond the investigation phase."
Either council would have the right to terminate the memorandum at any time.
The DCC is also set to decide at its meeting on Wednesday on options to put in front of the public regarding the structure of water delivery in Dunedin.
Staff recommended the council propose Three Waters delivery remain in-house and an alternative option of setting up a council-owned Three Waters company also be presented for public feedback.
DCC chief executive Sandy Graham said no decisions had been made yet about collaborating with Christchurch, but "at the forefront of our thinking is the desire to deliver the best possible service for our communities while ensuring we leave no stone unturned in our search for efficiency".
"There is a real opportunity for our two councils to create a new way of working that improves customer service and drives significant cost savings for ratepayers.
"Individually, both councils have a wealth of expertise and working together will give us the ability to attract new talent, as well as the scale needed to truly make a difference."
Staff had recommended investigating the possibility of shared services because this had the potential to reduce costs and enhance the delivery of water services, "particularly if large metros are involved", a report for councillors said.
There had been discussions with other councils, but these "have not progressed to the stage where there is an identified practicable option suitable for consultation".
The two metropolitan councils did not make a joint announcement about the proposed memorandum of understanding.
A statement from the Dunedin City Council included Dunedin comment only.
Christchurch City Council chief executive Mary Richardson said the councils had come together to identify avenues for collaboration in response to the government’s water reforms.
They were looking at a strategic partnership, she said.
If it is established, the working group would report back to both councils with recommendations later this year.
