Selwyn District councillors spent about five hours today hearing from a range of experts and staff options to manage water services.
The two options on the table were setting up a new company to take over water services or keeping the management in-house.
All 10 councillors decided to hold which way they are going to vote until the next Wednesday's council meeting when a formal decision will be made.
The council staff's preferred option is to develop a water services council-controlled organisation (WSCCO).
Last week, residents sent a strong message in their submissions to the council – don’t create a new company to manage water.
The overwhelming majority of the 423 submissions rejected it, with 86.1% wanting the council to keep water services in-house while leaving the option open to establish a WSCCO in the future if needed.
Key concerns about the WSCCO included higher costs, the risk of privatisation, and reduced local control.
Deputy mayor Malcolm Lyall said that following deliberations, most of the submitter's concerns had "been put to bed."
Submitters were concerned that under the model, a WSCCO would need to have its own board, chief executive, finance, and human resources teams.
“It’s pure duplication of what you already have,” Southbridge resident Lieuwe Doubleday said in his submission.
Many submitters praised the council for its current management and asked it not to fix something that was not broken.
“These services appear to be run well currently by the council. Much of it throughout Selwyn is relatively new, you do it well, you do it quite cost effectively, why on earth would anyone with any commonsense want to change,” said Rolleston resident Edward Parker in his submission.
Council predictions show in-house model is still likely to be about 10% more expensive than it is currently, in order to comply with increased Government legislation, which is still being finalised.
In the short term, the WSCCO will be more expensive due to increased setup costs. On current estimations, in 2025/26, it will be 10% more expensive, increasing to 14% more in year two and 35% in year three.
But, over a 10-year period, it will be between 2% and 7% cheaper.
The finances of both models were a key talking point in deliberations.
On the assumption that 50% of the council's spending is related to water, both a water in-house model and a WSCCO would have about the same budget, even with the WSCCO having a 500% debt limit compared council's current debt of 280%.
Staff told councillors the main difference will be a WSSCO having the debt solely focused on water infrastructure as opposed to an in-house model where water services will have to compete with other capital projects such as roading and community facilities.
Staff said that once a WSCCO was set up, the costs would eventually flatline as it became self-sufficient.
Simpson and Grierson environmental and local government law specialist Mike Wakefield noted the Government was wanting councils to take a corporatised approach through a WSCCO.
Wakefield also noted that any privatisation was not possible under the legislation.
During submissions Rolleston Residents Association chair Mark Alexander supported keeping services in-house for now.
“A WSCCO can be created in the future if circumstances change. If a WSCCO is created and not needed it will be much more difficult and much more expensive to disestablish the CCO,” he said.
While it would be possible to disestablish a WSCCO, they did not have a figure for the cost of the process.
During submissions, concerns were also raised about the consultation process, with some residents feeling the three-week time-frame was too short and that the decision had already been made.
Resident Susan Farmer described the consultation as “a sales pitch” that seemed to push the community towards a WSCCO.
Regardless of the outcome, the council is required to submit a water services delivery plan to the Government by September.
If a WSCCO is chosen, the council has scheduled a June 30 start date for it to be up and running.
The council will formalise its decision on April 2.
