A multi-council Water Services Council Controlled Organisation jointly owned by Manawatū District Council and Palmerston North City Council for the delivery of water services across both Councils.

This option would see Manawatū District Council and Palmerston North City Council join together to create a Water Services Council Controlled Organisation.

This option would result in the connected households of the Manawatū District paying a water service charge which is:

  • on average $421 more per year than the status quo over the first 10 years
  • on average $426 more per year than the status quo over the first 20 years

The water service charge would peak at almost $850 more than the status quo in year eight of the Water Services Council Controlled Organisation. This dramatic increase is largely due to considerable capital projects required by Palmerston North City Council. In a joint model, Manawatū District Council would be subsidising these projects throughout the 30 year period that was modeled. At the end of this period, the household charge for a connected property in the Manawatū District would still be higher than the status quo.

A multi-council Water Services Council Controlled Organisation jointly owned by Manawatū District Council and Palmerston North City Council for the delivery of water services across both Councils.
  • Water services would be removed from each individual Council and be managed under an independent Board of Directors.
  • All Councils would agree to a Statement of Expectations that would outline priorities and set the strategic direction.
  • Unlike Council management, no Council staff or Elected Members would be involved in the organisations’ daily decisions. This would be fully independent of Council.
  • Iwi involvement is yet to be confirmed as this would be determined by the Water Services Council Controlled Organisation.
  • Decisions made and the schedule of work programmes would be decided by the Water Services Council Controlled Organisation.
  • Future consultations would not take place through Manawatū District Council.
  • An amendment within the next Long-term Plan would be required due to the transfer of water assets to the Water Services Council Controlled Organisation.
  • The removal of water services from MDC would result in the relocation of some Council overhead costs. This stranded overhead is currently included in the three-water services charge funded through connected properties in Feilding and the villages. Within options two and three, a proportion of this overhead cost may need to be distributed District wide. This is a decision Council would need to make.
  • Option two and option three would remove decision making from Council and would require a balance of voices between partnering councils and other stakeholders.
  • As illustrated in these graphs financial modelling indicates that across both option two and three, water service charges for the Manawatū District would increase dramatically.

Extensive financial modelling has been completed to evaluate the feasibility of four different Water Service Council Controlled Organisations.

The modelling determined that the seven council and single council options were not financially feasible and were subsequently discounted. The two council and four council options were progressed to consultation to provide a contrast to the status quo.

For both options two and three, the financial analysis shows that water service charges applied to Manawatū District would increase more under a jointly owned Water Services Council Controlled Organisation.

If such an organisation is established, a pricing plan for each council and its water users would need to be set. The four councils have worked with external consultant, Morrison Low to explore various options, including delaying the harmonisation of the water service charge.

Harmonisation, sometimes referred to as cross- subsidisation, means that connected households across all partnered Councils' contribute the same amount to the Water Services Council Controlled Organisation. A timeline to implement harmonisation, if decided, would need to be established and could be introduced over a number of years. This would result in a rise in household charges for those in the Manawatū District in order to meet the costs of the Water Services Council Controlled Organisation and the required investment programme across all partnered Councils.

Until the Water Services Council Controlled Organisation is established, it is not fully known how the exact charges would be applied across the two or four councils.

The only option where Manawatū District connected households aren't financially disadvantaged is option one the status quo, where water rates consistently sit lower across the 30-year period as indicated in Figure 3 within option 3.

In addition to establishing a pricing plan, the establishment of any Water Service Council Controlled Organisation would see all water, wastewater and most stormwater assets and debt transferred to the new entity. Council Three Waters debt was $52.4M of a total $92.3 Council debt as of 30 June 2024.

This transfer of debt would free up substantial borrowing capacity for Council to invest in other infrastructure and community assets. Whilst increased borrowing capacity is advantageous, it is noted that any new Council borrowing would likely be funded by, and therefore increase, rates within Manawatū District. These additional costs would be in addition to the water service charges invoiced by Water Service Council Controlled Organisation.