Let's compare the options

Ownership and Control

	WSCCO - A jointly owned Water Services Council-Controlled Organisation	SDC In-House Business Unit, with some changes
Who owns the water infrastructure assets?	The Regional WSCCO will own the assets. The WSCCO is owned by the South Taranaki, Stratford and New Plymouth district councils. A WSCCO cannot be privatised.	No change, Council will continue to own all infrastructure assets.
Who is accountable for performance?	An independent Board oversees the WSCCO, and is accountable to a joint committee made up of representatives from each owner council and iwi mana whenua.	The Council sets overall direction and priorities.
Who decided what work gets done?	The joint committee agrees priorities and expectations for the organisation. The Board prepares a water services strategy to achieve these, and ensures the organisation is focused on delivery.	A water services strategy is developed by Council outlining the priorities for service delivery and future investment. The business unit manages the delivery of services.
How does the community have a say?	Community feedback processes for the WSCCO will be determined by shareholding councils.	The business unit reports to Council just like now. Delivery is accountable to the public through usual democratic processes; community consultation and feedback on Council planning documents.
How does the funding work?	Consumers pay water charges to the WSCCO. A WSCCO can borrow up to 500% of its revenue. Any loans are guaranteed by shareholding councils – not by water assets.	Funding for water remains part of overall Council revenue and debt, but fully separated (ringfenced) from all other Council work. Water charges are paid to Council.
How are fees and charges set?	Fees, charges and water tariffs are set by the WSCCO and will become standardised across the region.	Fees, charges and water tariffs will be set by Council for the Stratford District only. These are likely to be different from what is set by neighbouring councils or council-controlled organisations.

Governance and Accountability

Advantages and Disadvantages

	WSCCO - A jointly owned Water Services Council-Controlled Organisation	SDC In-House Business Unit, with some changes
Advantages	Combines the resource and customer base of all three councils Has the ability to borrow more for investment, which improves affordability Removing debt servicing costs from Council accounts will improve Council’s capacity to service loans for other activities Provides a clear separation between Council and water services governance, management and finances. A regional programme of work will provide a more attractive market for suppliers, better opportunities for efficiencies, and offer better opportunities for staff Compliance costs are shared, and service levels will be standardised across the region Greater capacity to respond to emergencies Compliance costs are shared, and service levels will be improved and standardised across the region. Greater capacity to respond to emergencies.	Least disruptive in the short term Avoids costs of establishing and operating a new organisation Local council officer knowledge and management of council water assets Maintains the community’s direct link to the people who control investment decisions, i.e. elected members Transition to a joint model in the future is possible if required
Disadvantages	Costs to establish and operate the new organisation, and the risks and higher level of uncertainty associated with this Potential impact on council staff and other council business units Costs of other council services will increase to cover expenses currently funded via water services revenue Reduced ability for Elected Members or the community to influence decisions relating to water and wastewater services Difficult to return to an in-house model in the future	Less opportunity to achieve the benefits of scale Smaller customer base to pay for services May limit the ability to attract and to keep good staff May limit the ability of council to respond to an emergency Increased compliance and reporting requirements will be met by council alone

Impact on Rates and Charges

WSCCO - A jointly owned Water Services Council-Controlled Organisation

SDC In-House Business Unit, with some changes

Customers will pay water service charges to the WSCCO.

Ratepayers would see a drop in their rates bill, as their payments for water services would be made to the WSCCO.

However, it is unlikely that your overall rates bill would reduce by exactly the same amount you currently pay for water services. This is because we’d continue to manage stormwater services in-house, and in the short term might need to provide services on behalf of the new organisation such as Information Technology, finance, human resources or customer service support. Over time, these services and costs would likely transfer to the new entity.

There may also be some overhead costs that were previously funded from water services, which could increase the rates charged for other Council activities.

Financial modelling* suggests that due to the benefits of scale, willingness to carry more debt, and a larger base of customers, increases on charges would be lower under a regional WSCCO.

For example, a customer paying about $900 a year for their drinking water and wastewater services in 2025 would pay about $2200 in 10 years, and $2,900 in 30 years under this option.

Water service charges will continue to be paid to Council.

The amount you pay for all water services will be clearly set out on your rates bill.

We’ve already mentioned the cost of delivering water services is getting more expensive, so we’d expect the water service charges on your rates bill will continue to increase to reflect this. This will also be caused by increased compliance and reporting costs for council to meet as part of Government legislation.

Financial modelling* suggests that due to the benefits of scale not being realised and with a smaller base of customers to cover new compliance requirements, increases on charges will be higher than the regional WSCCO over the long run.

For example, a customer paying about $900 a year for their drinking water and wastewater services in 2025 would pay about $2300 in 10 years, and $3,100 in 30 years under this option.

Typical household in the Stratford District

This graph compares what a typical Stratford household (2.7 people) could expect to pay on average for drinking water and wastewater services between the SDC in-house business unit (SDC-IBU) model and the joint Taranaki model (SDC - Regional model) over 30 years. Stormwater is not included in this comparison graph.

*An important note about these numbers

When making projections about the future we have to make certain assumptions, which may or may not turn out to be accurate. The information used for making financial projections is based on things like past history, the experiences of others, efficiencies achieved through economies of scale and willingness to take on significant debt under a regional model, budgets and projects from our Councils’ Long-Term Plans, Asset Management Plans and 30-year infrastructure strategies. They also include the assumption of price harmonisation of water and wastewater services over 10 – 15 years. While the numbers may vary from what will actually happen, the graphs are useful for comparative purposes.

Standardising charges

Currently in the Stratford district there are a couple of ways properties pay for water supply. Most town (urban) properties pay a flat charge each year for water (called a water targeted rate), while rural and high users pay water supply by the amount they use (called volumetric charging) on top of the flat charge.

Under a regional model water and wastewater charges would be standardised (price harmonisation) over a period of 10-15 years. This means everyone in the service area will pay the same price for the same service, and the harmonisation will be gradual to avoid large price increases all at once.

Our water and wastewater charges are already standardised across the Stratford district, so under an in-house business unit price harmonisation will continue, and future charges would be determined by Council.

Forecasts of this kind of “price harmonisation” effect is shown in the Water and Wastewater Charges Harmonised graph below.

Drinking water and wastewater charges harmonised

Impact on Debt

One of the benefits that Local Water Done Well introduces is the ability for a separate water services entity to borrow more money based on its revenue, than a council can.

This is particularly helpful in a case where a council is at or near its borrowing limits. This isn’t the case for the three Taranaki districts, which all have sufficient borrowing capacity to meet forecast water infrastructure investment needs.

However, creating a WSCCO, and moving existing debt related to two waters off the council balance sheet, would improve each council’s ability to service its remaining debt (a bit like a smaller mortgage would leave more money in the household budget). Inherited, and any new debt, would now be carried and serviced by the WSCCO.

	Total Debt	Two Waters Debt	Water Debt as a % of Total Debt
SDC	$42 million	$10 million	24%
STDC	$181 million	$92 million	51%
NPDC	$194 million	$194 million	43%

Numbers based on each council’s Long Term Plan, as at 30 June 2025 (rounded).

WSCCO - A jointly owned Water Services Council-Controlled Organisation

SDC In-House Business Unit, with some changes

Along with the revenue from water service charges, all existing drinking water and wastewater services-related debt would be transferred to the regional WSCCO. This would improve the ability of each council to service its remaining debt.

Under LWDW, a WSCCO can borrow more money to fund infrastructure projects than councils can, based on the same revenue.

For the financial modelling, it was assumed that the WSCCO’s debt position would be significantly higher than the current combined council debt.

There would be very little change in debt for the council with an in-house business unit in the short term.

Over time, debt would change in line with the requirements of upgrades, growth and replacements of key assets, as set out in council’s Long Term Plan. For the financial modelling, it was assumed that Council’s debt position after 30 years would be similar to now

To date Council has limited its borrowing to reduce the impact on ratepayers, and our current debt position would allow us to borrow for significant infrastructure projects as required.

Impact on Levels of Service

WSCCO - A jointly owned Water Services Council-Controlled Organisation

SDC In-House Business Unit, with some changes

No change is expected to levels of service.

Water services
Over time, it is likely that service levels would standardise across greater numbers of customers. New national standards and regulations around water quality, engineering and customer service would also be met.

Other Council services
Would be unaffected, although some services may be needed to support the establishment of the WSCCO.

Growth
With a larger customer and revenue base, the regional WSCCO would be better able to deliver investment to support growth, and manage the growing water services network. The decisions on where investment is focused would sit with the WSCCO rather than with individual councils.

Climate change
A larger organisation will be better able to plan for and work with councils to mitigate potential climate change effects.

Civil defence
A regional WSCCO will be better placed to respond to emergencies relating to water and wastewater services.

No change is expected to the levels of service.

Water services
These would not change, except for meeting the increased reporting and compliance requirements under Local Water Done Well. New national standards and regulations around water quality, engineering and customer service would be also be met.

Other Council services
Would be unaffected.

Growth
Investment in new infrastructure would continue to be decided by elected members in line with priorities set out in the Long Term Plan.

Climate change
We don’t expect any changes to current levels of investment to address climate change impacts.

Civil defence
No change.