Alternative option - Establishment of a WSCCO

Under this option, Ashburton District Council will establish a Water Services Council Controlled (WSCCO) to manage and deliver water services to the community.

The new WSCCO will operate independently, with its own governance and management structures, while the Council will act as its shareholder.

Key features of the WSCCO

  • Council owned organisation focused on water services
  • Council or its committee appoints a competency-based board of directors
  • WSCCO board is accountable to council as shareholder and reports regularly on performance (shareholder is accountable to community)
  • Council issues a Statement of Expectations to the WSCCO
  • WSCCO prepares Water Services Strategy guided by Council’s Statement of Expectations
  • WSCCO implements Water Services Strategy and reports regularly on performance including financial statements
  • WSCCO must comply with regulations set by Taumata Arowai and the Commerce Commission.
  • Water charges are set annually by WSCCO, but it must transfer to volumetric or fixed charges within five years of establishment
  • Funding capacity allows borrowing up to 500% of operating revenue

Advantages

This section covers benefits of water services delivery through a WSCCO.

  • Water focused governance

    Professional, competency-based, independent board dedicated to water services with access to specialist skills, offers greater potential for improved water services delivery.

  • Funding capacity

    Offers borrowing limit of up to 500% of total revenue supported by Council guarantee.

  • Sustainable

    The water-focused nature of WSCCO eliminates the competing priorities scenario, which is inherent in the SABU model, offering greater potential for long-term sustainable growth.

Disadvantages

This section covers potential risks associated with the water services delivery through a WSCCO.

  • Accountability

    Less direct accountability to the community, but WSCCO will be accountable to Council.

  • Affordability

    Establishing and transitioning to the WSCCO will incur costs, and financial modelling indicates a slight increase in household costs compared with a SABU.

  • Industry competition

    Although existing staff can transfer to the WSCCO, the organisation’s small scale may not be sufficient to retain or attract staff or expertise.

  • Setup costs

    Initial setup costs to establish the organisation and governance.

  • Transition period

    Transferring staff and existing relationships (e.g. Environment Canterbury, Mana whenua) to the WSCCO will take time to achieve and transition risks would require strong collaboration with Council.