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Massive Decisions For Hamilton’s Water Services

The future of Hamilton’s water services and finding the best way to deliver them for future generations, will be one of the key topics for Hamilton City Council as it awaits further information from Government.

Water services represent around 30% of Council’s total expenditure, so future structures for water will have a significant impact on Council rates in the years to come.

Government’s Local Water Done Well policy requires councils, or groups of councils, to prepare a plan for their water services within the next 12 months.

Councils are encouraged to look at partnerships or Council-controlled organisations (CCO) to find efficiencies through economies of scale. New legislation is expected to be enacted later this year to make transition to these organisations easier, and to create new economic regulation to set standards for how water service investment must be managed.

Yesterday’s (30 May, 2024) Council meeting received a progress report on the city’s response to Government policy and approved reallocating a total of $1.6M in government funding towards identifying the best future options for Hamilton’s water services.

Mayor Paula Southgate says there is plenty of evidence a CCO approach offers benefits for the city and the region, but there remains huge uncertainty on the detail of Government direction, and whether funding or new funding tools will follow from central Government.

“We know the future costs of water are massive, and they are increasing. We also know how we manage these costs will have massive impacts on future rates.

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“The long-term outcomes are simple. We need to deliver high quality drinking water, wastewater, and stormwater services, protect our environment, and meet our regulatory responsibilities. At the same time, we need to do this in a way which allows for planned growth and is the most cost-effective for our 180,000 residents and the thousands of visitors who use our water services every day.

“What isn’t simple, or easy, is building the right organisation to do that in the future and taking our community on this journey with us. Any new structure must provide a strong voice for Hamiltonians,” Mayor Southgate said.

Previous detailed investigations have shown there are significant savings and efficiencies if councils work together to deliver water services at a large scale. A 2015 business case identified $480 million in efficiencies over 25 years if Hamilton, Waikato, and Waipa Councils were to operate water services as one network.

“It’s clear there is substantial work to be done in coming months to understand the costs and benefits of any combined service, to consider governance and representation arrangements and to prepare for a potential transition plan.

“There remains uncertainty on the detail of timing and impacts of new legislation, not only for establishing a CCO but for any new economic regulation which may apply to one,” Mayor Southgate says.

“Should Council look to progress any potential CCO at pace, this detail needs to be developed through a formal business case, which will inform a full public consultation phase before any final decision is made.

“We have time to work through these issues and ensure any proposal offers Hamiltonians the best long-term solutions for Three Waters services.”

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