FAQs

Council has a big decision to make about how we deliver water services (drinking water, wastewater and stormwater) into the future.

In 2016, a water contamination issue in Havelock North led to widespread illness, prompting a national review of water service delivery. The inquiry found systemic failures in water management, and a 2017 review identified a $185 billion funding shortfall over 30 years.

In response, the previous government introduced new regulations, created Taumata Arowai (a new water regulator), and planned to shift water services from councils to larger entities. However, after the 2023 election, the new government repealed these changes and replaced them with the Local Water Done Well (LWDW) policy, returning control to councils with specific options to establish new delivery models and to consult with our community, these options are:

• In-house business unit for water delivery (our current model)
• A Water Services Council Controlled Organisation (WSCCO)
• Joint Local Government arrangements
• Consumer Trust – where council assets would transfer to a consumer-trust owned organisation

After carefully considering all the options, Council has indicated that a WSCCO is the best way to future-proof Selwyn’s water infrastructure. As New Zealand’s fastest-growing district, we need a model that ensures safe, reliable water services both now and for future generations.

A WSCCO will be managed by specialists in water delivery, infrastructure funding, and long-term debt management. This dedicated expertise allows for more efficient operations, better long-term planning, and a stronger focus on water services without competing priorities within Council.

Financially, a WSCCO provides greater borrowing capacity than Council alone, allowing for essential infrastructure investment without sudden rate hikes. Spreading costs over time ensures that both current and future residents share the responsibility of maintaining a high-quality water network.

Governance would be handled by an independent board, reducing the risk of political decision-making that could delay necessary investment. However, Council would remain the sole shareholder, keeping control and accountability local.

Council is also investigating an in-house water delivery model as part of this consultation. However, keeping water services in-house does not mean things will stay the same - significant investment will still be required to meet new government legislation and compliance requirements. While both options have benefits and risks, the cost of upgrading and maintaining water infrastructure is unavoidable under the new legislative framework.

An in-house model would however limit Council’s ability to borrow for the large-scale infrastructure projects needed to support Selwyn’s rapid growth. While all options are being carefully considered, a WSCCO provides a more financially sustainable and future-proofed solution, ensuring safe, reliable water services for the long term.

Under the new legislation, councils must fund water infrastructure upgrades without additional government funding. One key advantage of a WSCCO is its ability to borrow up to 500% of its revenue through the Local Government Funding Agency (LGFA), compared to the 280% cap for councils managing water in-house. 

This increased borrowing capacity allows for critical upgrades to be financed over a longer period, avoiding sharp rate increases for residents. In contrast, councils that retain water services in-house may face financial constraints, potentially leading to higher rates or delays in necessary infrastructure projects. This makes choosing the right model essential to ensuring reliable, cost-effective, and sustainable water services for communities.

The tight timeframes are partially driven by new Government legislation, but also by Council's desire to be proactive, take a leadership role in the water services space and provide certainty for our community and our staff.

The Government has set tight timeframes for the legislative changes, which means that councils are required to develop and submit Water Services Delivery Plans (WSDP) by 3 September 2025. These plans must outline how water services will be delivered and financed over the next 10 years, ensuring compliance with new regulatory standards.

Council wants the people who will deliver future water services, to be involved in developing the WSDP. To achieve this by 3 September, the new model, whether it is the future in-house model or as a WSCCO, needs to be in place by July 1.

This will create certainty for the community and for our staff who will create a new in-house model or move to the new WSCCO. Delaying consultation could jeopardise the ability to develop a comprehensive plan that reflects community input and meets governmental requirements within the required timeframes.

If Council were to delay the discussion about the delivery model and develop the water services delivery plan in isolation, any new model could face challenges from the start and may be unable to deliver the plans Council commits to or fail to comply with regulatory standards.

No. Due to the tight timeframes, some steps have had to happen in parallel with consultation to ensure we can meet regulatory deadlines if the WSCCO proposal is supported.

Appointing a chair now does not mean a final decision has been made - it simply ensures that, if a WSCCO is the preferred option, we are in a position to move forward smoothly and quickly.

Importantly, any work done to establish the WSCCO won’t be wasted. If the decision is made to proceed with a future in-house water delivery model the structures, processes, and expertise developed can be absorbed into an in-house model, ensuring that investment in setup is not lost.

Based on Selwyn’s rapid growth, geography, and specific water infrastructure requirements, a WSCCO has been determined as the best model for the future. 

Other councils will be making their decisions based their own unique circumstances including different infrastructure challenges, borrowing capacity, and service delivery considerations compared to a fast-growing district like Selwyn.

For Selwyn, a WSCCO is about creating reliable and safe intergenerational water services that are also expected to be more cost-effective over the long term. Keeping water services in-house would still require significant investment to meet new government regulations, but Council would be limited in how much it could borrow to pay for these upgrades. This could lead to:

• Higher costs over time – As compliance costs increase, they would need to be covered directly by ratepayers.
• Financial restrictions – Limited borrowing capacity could delay necessary infrastructure projects.
• Potential risks – An in-house model may struggle to keep up with regulatory changes, population growth, and future service demands.

A WSCCO offers a more flexible and financially sustainable way to meet Selwyn’s unique water service needs while ensuring future-proofed infrastructure for generations to come.

A WSCCO is designed to improve efficiency, not add unnecessary bureaucracy or duplicate roles. While there are initial setup costs, these are balanced by the long-term financial and operational benefits of having a dedicated water entity.

One key advantage is access to higher borrowing limits through the Local Government Funding Agency, allowing the cost of essential infrastructure upgrades to be spread over a longer period. This helps reduce the immediate financial impact on ratepayers while ensuring safe and reliable water services for the future.

We understand that rising costs are a major concern. Under the WSCCO model, water charges may be slightly higher in the early years, but financial modelling shows lower costs from Year 10 onwards.

Keeping water services in-house would still require major investment to meet new government regulations, but Council’s borrowing capacity is limited. This means the cost of upgrades would fall more directly on ratepayers.

Developers will still be required to pay development contributions. However, the details of how these contributions will be structured under a WSCCO are still being determined. The Local Government (Water Services) Bill, which will set the rules for development contributions, only recently closed for submissions and is expected to become law around May. This legislation will clarify how much councils can require developers to contribute and whether there is flexibility to adjust these amounts in the future.

A WSCCO provides a smarter financial approach by allowing greater borrowing capacity. This means infrastructure costs can be spread over a longer period, avoiding sharp rate increases. While there are some governance and operational costs, a WSCCO also unlocks financial benefits that Council wouldn’t have on its own, helping to keep water services sustainable and affordable in the long term.

A WSCCO would still be fully owned by the Council, meaning there’s no loss of local control or accountability. Council would continue to set strategic objectives, oversee operations, and hold the WSCCO accountable for performance, safety, and affordability.

A key benefit of a WSCCO is its sole focus on water services, rather than competing with other Council priorities. This allows for better long-term planning and investment while keeping costs in check.

The WSCCO would be led by an independent board with expertise in water services, infrastructure funding, and debt management. This ensures water services remain safe, reliable, and cost-effective while keeping decision-making local and transparent, with Council maintaining oversight to serve the best interests of Selwyn residents.

Privatisation is not an option under the WSCCO model. The new legislation ensures that councils retain ownership of water infrastructure under this delivery model. 

A WSCCO is a publicly owned, council-controlled organisation, meaning the council maintains control and remains accountable to the community. The key difference is that an independent board would oversee day-to-day operations, ensuring that long-term investment decisions are made based on expertise rather than short-term political pressures. This structure helps safeguard water services while ensuring they remain affordable, reliable, and in public hands.

Under the Local Government (Water Services Preliminary Arrangements) Act, a WSCCO can only provide services for the council(s) that own it. Since CORDE holds multiple civil engineering contracts, including roading and water services with several councils, it doesn’t meet this requirement. To become a WSCCO, CORDE would need to terminate all non-Selwyn District Council contracts, which is not a viable option. Also, a CCO service delivery needs to focus on the delivery of water services only. Because CORDE also deliver contracts across facilities, roading and land development this makes them ineligible.

To help manage and control the costs of the WSCCO over time, it is expected that the WSCCO will be able to secure financing through the Local Government Funding Agency (LGFA) under the Local Water Done Well policy. LGFA provides financial support to the local government sector, including CCOs, and as part of this, requires credit support from the shareholding councils. This support comes in the form of uncalled capital security, which means the Council will act as guarantor for the WSCCO, but the capital remains unused unless there’s a default on the financing arrangements. In practice, the Council would subscribe for uncalled capital of at least $450 million, which is anticipated to cover both the initial and future borrowings of the WSCCO for the next five years, ensuring financial stability and cost control.

The Council’s existing resources may not be enough to meet future water service demands and evolving regulatory requirements. An in-house model would still require substantial investment to comply with new regulations and may struggle to keep pace with population growth and increasing service demands.

A WSCCO is being proposed as it would provide a more adaptable and financially sustainable solution, ensuring Selwyn’s water infrastructure remains resilient, future-proofed, and capable of meeting the needs of generations to come.

There are no extra projects planned under the WSCCO. The agreed programme of work as outlined in the LTP, would transfer to the newly established WSCCO.

The benefit of the WSCCO model means there would be dedicated water-focused operational and governance experts in water delivery, infrastructure funding, and long-term debt management, ensuring compliance with new regulations and improving service delivery for growing communities.

The WSCCO does provide flexibility to look at larger projects that would be difficult to fund with the inhouse model given its additional borrowing capacity (500%) and ability to carry/spread debt over a longer period. (An example is a Trade Waste facility).

Developers will still be required to pay development contributions. However, the details of how these contributions will be structured under a WSCCO are still being determined. The Local Government (Water Services) Bill, which will set the rules for development contributions, only recently closed for submissions and is expected to become law around May. This legislation will clarify how much councils can require developers to contribute and whether there is flexibility to adjust these amounts in the future.

A WSCCO would be led by experts in water governance, service delivery, infrastructure funding, and long-term debt management, ensuring a dedicated and highly skilled focus on water services.

This specialised expertise allows for a more commercial approach to identifying and achieving cost efficiencies while maintaining high service standards. A WSCCO would also enhance the customer experience for Selwyn residents by operating as a service-focused entity for water only.

Additionally, shifting governance to an independent board helps prevent politically motivated delays in long-term water infrastructure investment, while Council retains ultimate control and accountability to Selwyn residents as the sole shareholder.

Council explored all options put forward by government, including potential partnerships with other councils, both nearby and further afield. However, each came with challenges such as differing priorities, logistical complexities, and significant additional costs.

A key consideration was ensuring any model chosen remained practical, efficient, and financially sustainable for Selwyn. The WSCCO being proposed has been designed with flexibility in mind, allowing for future collaboration if opportunities arise. In contrast, an in-house model would make transitioning to a joint WSCCO down the track more complex.

The total Council and proposed WSCCO debt would be approximately $600M at the end of 2033/34. This includes any debt repayments over the respective years.

Overall the monies will be spent on capital improvements, maintaining levels of service and any capital renewals for wastewater and water supply.

An example of how the WSCCO will affect rates for the average urban house over the next 10 years is provided on page 18 of the consultation document. For a detailed year-on-year breakdown, please refer to the following link.