Local Water Services: Should Rotorua Go It Alone?

Sunday, 9 March 2025, 9:53 pm
Article: Laura Smith - Local Democracy Reporter

Rotorua’s council is looking to its Eastern Bay of Plenty counterparts for a potential joint water services delivery model.

While elected members say they prefer an in-house model – at least to begin with – they are also keen to keep the door open and explore the feasibility of a joint-council model.

Rotorua Lakes councillors discussed the matter at a workshop on Tuesday and Wednesday.

The workshop’s purpose was to update elected members on water services delivery option modelling under the Government’s Local Water Done Well reform programme, and to ascertain a preferred option for consultation.

The coalition Government’s plan to address New Zealand’s long-standing water infrastructure challenges replaced the previous Government’s Three Waters Reform.

Councils need to submit water services delivery plans for review by September 3.

Council infrastructure and environment group manager Stavros Michael said the plan needed to identify the present level of services, meet quality standards, be financially sustainable and support housing growth and urban development.

Community consultation needed to include at least two options. The council directed staff in September to begin creating a water services delivery plan.

Michael said the three models it worked on were an in-house service, a council-owned water organisation and a multi-council-owned organisation.

In-house delivery would mean direct council oversight and decision-making, while a council-controlled organisation (CCO) would have an appointed board of independent, professional directors.

Strategy setting for in-house delivery would involve public consultation and it would report to the council.

A CCO would work within council shareholder expectations and consult with councils when setting strategy.

Chief executive Andrew Moraes said the potential board composition had not been developed.

Councils, as shareholders, would appoint and remove board members, but could not veto board decisions.

Moraes said beyond Department of Internal Affairs (DIA) due diligence, he would get a “very heavy-duty” financial status review before recommending to partner with another council.

Debt headroom would increase under a CCO model, allowing for a 500% debt-to-revenue ratio, compared with Rotorua council’s self-imposed limit of 250%, or 280% under the Local Government Funding Agency.

Discussion showed most councillors were keen to at least begin with an in-house option, but thought the mayor and chief executive should discuss a joint-council option with Eastern Bay councils Whakatāne, Opōtiki and Kawerau.

Informal, then formal discussions will be held and the council will consult the community alongside this year’s annual plan process.

Councillors also heard from the Commerce Commission and Water Services Authority-Taumata Arowai.

Rotorua’s 2024-34 long-term plan includes investment of $427.5 million in water supplies ($90.9m), stormwater ($169.2m) and wastewater ($167.4m) infrastructure during the next 10 years.

- LDR is local body journalism co-funded by RNZ and NZ On Air.

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