Case Study 12: Water Services Integration in Wellington
Who Is Involved?
Wellington City Council and Hutt City Council.
What Led To The Joint Arrangement?
The feasibility of rationalising the water services functions of the two city councils in the Wellington region had been under consideration for some years, with four proposals considered between 1997 and 2000.
How Does It Work?
A project team was formed, comprising two officers from each of the two city councils. A workshop in August 2001, attended by staff and iwi representatives, established project objectives, criteria, options, and a framework for assessing options. Council resolutions, public consultation, and iwi views gave the staff a mandate to work together to draw up a proposal.
The two city councils directed that any revised proposal should allow participation by other local authorities should they so choose. The other Wellington region local authorities – Upper Hutt, Porirua, and Wellington Regional Council – were invited to participate in the project and to attend project team meetings. They all received agendas and meeting minutes.
The work of the project group culminated in a joint report published in October 2002, called “A Co-operative Approach to the Management of Council Water Services in the Wellington Area”. Public consultation on the proposal took place in October/November 2002, led by a joint panel of councillors. The councils gave their approval to the proposal in December 2002.
Project costs were divided according to a formula reflecting the relative water servicing costs of the two city councils, or, in particular cases, were absorbed into existing budgets. The cost allocation formula was independently reviewed. It was agreed that unit establishment costs would be shared in the same proportion as relative current net expenditure on water services.
A financial analysis of the joint management unit option was carried out, pointing to net savings of at least $4.1 million in the first five years, and ongoing net savings of at least $1.6 million a year thereafter. Savings are expected to come primarily from economies of scale and fewer staff.
The joint water management unit was established on 1 July 2003, and will be overseen by a board made up of two councillors from each city council and two independent representatives.