Combining three Wairarapa councils would save some operating costs, but taking on regional council functions would be a huge cost, a study has found.
The Masterton, Carterton and South Wairarapa councils have set up a working party to look at governance options, and have already concluded they should combine to form either a single district council or a unitary authority which includes regional council functions.
A study of the costs by consultants Morrison Low has found the district council option is more cost-effective in the short term.
It said a single district council would produce an initial operating surplus of about $1 million, due to reduced governance and management costs, with some extra savings to come in the long term in items such as roading and other contracts.
But it would suffer if it also took over regional functions carried out by the Wellington Regional Council, producing a shortfall of about $8.6 million.
A Wairarapa Unitary authority would give the Wairarapa community greater control over local and regional decisions, but it would have far less purchasing power for regional functions than the larger Wellington Regional Council, the report says.
"The report raises questions about why so much more is spent on some regional council activities in Wairarapa and, what are appropriate levels of service here," Wairarapa mayors Garry Daniell, Adrienne Staples and Ron Mark said in a joint statement.
They said they needed to be open-minded about solutions, but "it is unlikely to be as simple as becoming a Wairarapa district council and leaving regional functions to Greater Wellington".
Auckland's eight councils combined to form a unitary authority following government legislation, without putting it to a vote. However, voters in Tasman District Council earlier this year rejected the idea of merging with Nelson.