A massive shake-up of Waikato's water management that could save hundreds of millions of dollars has been given its first tick of approval but knocked back a proposal to join up with the outfit running Auckland's water.

Waikato District Council has decided to cosy up with its regional counterparts in forming a ratepayer-owned council-controlled organisation to amalgamate much of the Waikato's water management rather than opting for a supercity liaison that was also on the cards. 

But the door has been left ajar for a Waikato District Council business unit to leverage off Auckland's Watercare Services Ltd should Hamilton City Council and Waipa District Council choose to go their separate ways.

Last October, Hamilton City Council, Waipa District and Waikato commissioned a $650,000 joint-study into the future of cross-boundary water management.

On Tuesday, Waikato District was the first to signal their intent, in principle, to form a ratepayer-owned council-controlled organisation (CCO).

At an extraordinary Infrastructure committee meeting, chairman Wally Hayes was adamant the CCO option was the way to go.

"The benefits of forming a sub-regional CCO with Hamilton and Waipa are very clear," said Hayes.

In May, Cranleigh consultants recommended the partnering councils form an organisation which could bring savings of $468m over 28 years.

"We will have economies of scale that will provide savings around operational expenditure, capital expenditure and debt optimisation."

Several reports painted a "grim picture" about water infrastructure and the country was "behind the 8-ball", he said.

"A lot of councils have shortchanged their communities and in doing so, have risked economic growth, created additional costs and provided services that are, quite frankly, sub-standard in many places."

Hayes said the CCO would remove political interference from decision-making and ensure water was managed correctly into the future.

A CCO would provide $100m in savings across the three partnering councils over 10 years - $28m of that was Waikato's share.

"This cannot be ignored," said Hayes.

Waikato's fourth option, to strengthen an existing relationship with Watercare, was examined alongside the Cranleigh report.

It also recommended a jointly owned not-for-profit CCO and council ownership of stormwater with its management outsource to the CCO.

Members of the Infrastructure committee voted unanimously to support the recommendation which would need to be ratified  and be up for debate in a full council meeting later this month.

Cr Jan Sedgwick was not in attendance but was granted leave of absence from the meeting.

Mayor Allan Sanson said the decision sent a strong message to ratepayers a CCO would bring "massive savings" and was the best thing to do.

He said they would have to wait for Hamilton and Waipa agreement before an extensive public consultation phase could begin and was pleased councillors kept an open mind.

"They haven't focused solely on the savings, which are substantial but have also considered the non-financial benefits including better environmental outcomes for the district," said Sanson.

Cr Clint Baddeley said water was a finite resource and needed to be managed correctly alongside other essential services.

"If we are going to be serious about developing a plan for infrastructure in the whole region, this is potentially the first step in that."

New Zealand Council for Infrastructure Development chief executive Stephen Selwood threw the weight of his organisation behind the decision.

"We think the benefits from improved scale and expertise are expected to save residents 14 per cent over the next decade while also providing better quality services," said Selwood.

Waipa Mayor Jim Mylchreest said his council was still weeks away from making a decision.

"It's good that someone has taken the lead but from Waipa's perspective, we are still looking at additional information and it will be at the end of the month before we have any kind of indication," said Mylchreest.

Hamilton Mayor Julie Hardaker said a decision would likely be made in July but would take longer to get all councils making a final decision on whether to proceed.

"I expect it will be a few months away before we know, fully, where all the three councils stand on the matter," said Hardaker.

Elton Smallman

- Stuff

Image: Bruce Mercer - Waikato District Council Mayor Allan Sanson wants a subregional CCO to go ahead. 


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