Local Water Done Well
As a community, we have a big decision to make about how drinking water, wastewater, and stormwater services are delivered in the future.
We have joined three other councils - Gore District Council, Central Otago District Council and Waitaki District Council - to form Southern Water Done Well to tackle the complex issues we all face.
As a group we are committed to finding the best options for the future delivery of services that are sustainable and efficient, meet community expectations, and comply with the Government’s Local Water Done Well legislation.
Local Water Done Well means we must change how we manage water services and will require more investment from councils to meet the Government’s stricter regulations. It gives councils more control over their own future while introducing more central government oversight of how we manage our water resources.
The Government has made it clear it wants to see more councils working together to make Local Water Done Well successful.
Doing things the way we have always done them isn’t an option as current operating models are likely to fall short of meeting new legislative requirements, including financial sustainability.
Water costs are increasing for all councils due to:
- population and industrial growth,
- increasing costs to build and renew infrastructure,
- the need to invest in meeting higher water and wastewater standards,
- additional compliance and regulation through Taumata Arowai and the Commerce Commission,
- ageing infrastructure, and
- mitigation for climate change.
Together, these will create enormous costs for councils and communities in the future.
In a few weeks, we will be talking to you about three service delivery options and what they mean for our community.
First, here’s some background on how we got to where we are today and why.
What is Local Water Done Well?
Local Water Done Well is the Government’s plan to address New Zealand’s long-standing water infrastructure challenges. It replaces the previous government’s Three Waters reform proposals.
It aims to:
- Tackle New Zealand’s long-standing water infrastructure challenges by enhancing the quality, sustainability, and affordability of water services nationwide
- Introduce new economic and quality regulations to improve service standards
- Ensure water services are future-proofed and financially sustainable
- Make water services delivery more effective and efficient
Key components of Local Water Done Well include:
- Fit-for-purpose service delivery models and financing tools
- Ensuring water services are financially sustainable
- Introducing greater central government oversight, economic and quality regulation
The journey to Local Water Done Well
The water reforms began to ensure everyone in Aotearoa New Zealand has safe, clean drinking water and to improve wastewater and stormwater management.
An outbreak of gastroenteritis in Havelock North in August 2016, when an estimated 5000 people got sick and four people died, was a major trigger for this work.
This event and the resulting reviews exposed serious issues with a lot of New Zealand’s water infrastructure, safety standards, and the need for stricter regulation.
What does Local Water Done Well mean for councils?
Local Water Done Well introduces changes to how water services are managed in the future. There are new rules for investment, borrowing, and pricing, and new options for delivering water services.
Local Water Done Well requires councils to choose a water services delivery model that will best meet their community's needs, provided it also meets financial sustainability and compliance standards.
It incentivises councils to collaborate, by allowing a jointly owned council-controlled water organisations to borrow more money specifically against three waters assets to invest only in water infrastructure. This allows councils to continue to invest in other key infrastructure areas more easily.
Under Local Water Done Well, all councils must:
- Meet new financial and regulatory requirements, ensuring water services are ring-fenced (i.e. the financial administration of water services must be kept separate from the rest of council)
- Invest in infrastructure to address long-standing issues
- Set fair prices that reflect the cost of delivering water services
- Develop a fit-for-purpose Water Services Delivery Plan by early September 2025 outlining how they will meet these requirements
Why are Water Services Delivery Plans needed?
Plans are a requirement under the Local Government (Water Services Preliminary Arrangements).
The plans are a ‘one-off’ way for councils to reflect on their current approach to the delivery of drinking water, wastewater, and stormwater services and demonstrate their commitment to a future model that is financially sustainable and meets quality standards.
Water Services Delivery Plans:
- Must include detailed information about water services operations, assets, revenue, expenditure, pricing, future capital expenditure, and how councils plan to finance and deliver their preferred delivery model
- Are for a minimum 10-year timeframe but can be up to 30 years. The first three years must be detailed
- Must demonstrate how the water services will be financially sustainable by June 2028
The Government can reject plans if they do not meet legislative requirements. If the Government is not satisfied with a council’s water services delivery proposal, it can also direct what councils should do.
Do all councils have to develop a Plan?
Yes, all territorial authorities must prepare a Plan. This includes all district and city councils, and unitary authorities. It excludes regional councils. Councils can develop plans individually or jointly with other councils if they propose to deliver water services through a joint arrangement.
What does financially sustainable water services mean?
Financial sustainability means revenue from water services (the charges residents and businesses pay) is sufficient to meet the costs of delivering water services. This includes meeting all regulatory standards and making long-term investments in water services.
How councils approach achieving financial sustainability can differ depending on local circumstances. Councils need to consider the balance between three key factors.
These factors are:
- Revenue - is there sufficient revenue to cover the costs (including meeting debt repayment and interest charges) of delivering water services?
- Investment – is the projected level of investment (in new treatment plants, replacement pipes etc) sufficient to meet levels of service, regulatory requirements, and provide for growth?
- Financing – are funding and finance arrangements sufficient to meet investment requirements?
Do communities get to have a say on future water services delivery?
Yes! We will be consulting on our water service delivery proposals in early May. In the consultation document we will have:
- Our preferred service delivery model
- An analysis of three options, including the preferred option
- Potential impacts of proceeding or not proceeding with the preferred option, including on rates, debt, levels of service and any charges for water services
- The implication for communities, if the preferred option involves establishing, joining or amending a joint water services organisation
