Local Water Done Well – December Update

The creation of a Water Services Council Controlled Organisation (WSCCO) by Hurunui and Kaikōura District Councils, is one step closer to a July 1 2026 start date, with the adoption of a Constitution and Shareholders’ Agreement.

After draft documents were considered by the Local Water Done Well Reference Group in November, with workshops run in December to refine the documents, followed by legal review —­­­­­­­ both the Constitution and Shareholders’ Agreement were approved by each Council at their respective meetings on December 16 and 17.

These contracts are a crucial part of the formation of the WSSCO, as they not only allow the organisation to be recognised by the Companies Office, they also help regulate the relationship between shareholders and the company, and set-up terms to protect both Councils in the instance of changes to legislation for example.

The Constitution summarises but is not limited to; company capacity and purpose, share issue and transfer, appointment of Directors; and governance around meetings and voting. While the Shareholders’ Agreement covers; classes of shares; the relationship between shareholders; loans and guarantees; dividend distribution; how decisions are made and changes to the shape of the WSCCO.

In preparing these documents, much consideration was given to potential future changes in shareholdings, including the possibility of additional shareholders – such as another council entering the agreement - or shareholder exit.

Appointment of Directors is also well covered. While the intention is that there will usually be 5 directors, there is provision for only 1 Director in place when the WSCCO starts up. It’s also proposed that the initial terms of board members shall vary between 1-3 years, so that 1-2 directors’ terms expire each year. Helping to ensure continuity of expertise and reducing risk that a quorum is unable to be achieved due to directors’ terms expiring.

The Constitution also provides for WSCCO liquidation, in case of changes to agreements, with a key part of this being; Any company land or asset affixed to any land or building would be transferred to the local authority in whose district that land or building is located. This means land or assets currently owned by a Council will stay in their possession or be assigned to a nominee if the organisation dissolves.

The next steps for the formation of the WSCCO will be the appointment of the initial directors and the establishment of the WSCCO as a legal entity. Keep a close watch on this channel in 2026 for more updates.