However, council staff have also moved to allay public concern such a move could lead to privatisation, water meters or higher water charges.
The first option would see the formation of SouthernWater, a CCO created and 100% owned by the council, with 100 council staff transferred to it and managing the city's $1.6 billion of water, wastewater and stormwater assets.
The council's Three Waters working party had been working on a detailed proposal for SouthernWater since initial plans for a CCO were discussed at annual plan hearings in January.
The results would be put before councillors at the finance, strategy and development committee meeting on Monday, seeking approval to proceed to public consultation.
However, councillors would also be asked to consider a second model suggested by Delta Utility Services, another council-owned company, and decide how to proceed.
The Delta proposal would see the creation of a new CCO to own the city's water assets, but with Delta providing all CCO services and 100 council staff transferred to Delta instead.
This option was outlined at a media briefing yesterday, fronted by committee chairman Cr Syd Brown, council city environment general manager Tony Avery and new chief executive Paul Orders.
A report by Mr Avery to next week's meeting said SouthernWater could achieve savings of $1.7 million-$1.8 million a year, or $10 million-$12 million over a decade.
The Delta proposal estimated savings of $2 million-$3 million a year across the Dunedin City Holdings Ltd group, $50 million in extra revenue to Delta and a $3 million-$5 million increase in Delta's annual dividend to the council, the report said.
However, Cr Brown yesterday stressed the Delta proposal contained financial projections that were yet to be tested, and questions remained about the figures.
The savings forecast under the SouthernWater proposal were also less than those first presented to councillors in January.
