Local Water Done Well Consultation

Who should deliver water services in the future?

This is one of the biggest decisions our Council will make for our district.

As part of the Government’s Local Water Done Well programme and new legislation, every council must consult with their communities on how we deliver water services in the future.

New Zealand is facing significant challenges when it comes to maintaining and upgrading essential infrastructure like roads, water, and electricity. The cost of this work is putting pressure on both government agencies and local councils, which ultimately impacts taxpayers and ratepayers. We need to consult on how we deliver our water services into the future.

Drinking water in particular is absolutely essential to maintaining life, and the cost for treating and transporting or reticulating water to our communities are significant.

Our current approach will place significant financial barriers on Council and will impact levels of service for other Council activities.

We have explored what a jointly owned water services organisation could mean for Horowhenua and we've developed three options for you to consider, along with projected costs for the coming decades.

Each option has its pros and cons, but one thing is clear. The more people who help share the cost of water services in the future, the better for everyone.

Why are we consulting on water service delivery?

In 2016, the Havelock North water crisis raised concerns about water management in New Zealand and the high costs to communities to ensure all kiwi had safe drinking water. This prompted the Government of the day to propose major water reform. While these reforms have changed under a new Government, the rationale for them remains the same - to ensure safe, sustainable, and financially viable water services for communities in response to increasing costs, regulatory requirements, and infrastructure challenges.

As part of the Government’s Local Water Done Well programme and new legislation, every council must consult with their communities on how we deliver water services in the future.

Our water situation today

We’re proud to have taken good care of water for Horowhenua, meaning you have safe and resilient water infrastructure. The reality though, is that we are the 10th fastest growing district in New Zealand and have major investment required which would mean we couldn’t invest in other Council services if we continue to deliver water services alone.

Horowhenua has over a billion dollars in water assets and while a considerable amount of development occurred in the district 60-70 years ago, a number of these assets now require upgrades and investment to keep up with growth. Equally important is the projected growth in our region and our community’s increasing expectations on service delivery across all the water activities.

What are our key considerations?

We’ve looked at everything from our assets, proposed work, structures of organisations, impact on existing staff, Iwi/hapū involvement, community involvement, legal aspects, digital and software needs, and of course the financial implications. We’ve prepared for water reform by bringing local waters in house saving $1m on operational costs and giving us the best possible opportunity to be reform ready.

Before you look at the options outlined in the Consultation Document and below, there's some things you need to know first.

• We explored the impact of various options on household costs. Effectively, the more water connections able to pay for investment, the better.
• The new legislation allows new Water Services Organisations to borrow more money to fund infrastructure projects than councils.
• Currently we can borrow 2.8 times our revenue (or up to 280% debt to revenue ratio). As part of setting our financial strategy, we have a limit of 250%. This makes sure there is room to borrow if something happens that isn’t planned for.
• Water Services Organisations will have leverage of up to 500% of operating revenues, subject to meeting prudent credit criteria.
• Which option would make us better able to meet new economic and environmental regulatory standards
• Which option would provide us the best opportunity to leverage shared professional expertise and improved operational efficiencies via economies of scale.
• Which option would position Horowhenua as a more attractive partner for Government's regional and national water infrastructure deals.
• How much influence both ourselves and our Iwi/hapū partners would have over decision-making
• How the options would impact on our environmental, social and cultural wellbeing
• Which option would allow us to invest in infrastructure projects and other Council activities when it is most needed and how would that work if we were to partner with other councils.

It’s important to acknowledge the situation we find ourselves in where four councils all have different preferred options and while legislation technically says we could set up a joint committee (to make decision making easier), the limited time between the legislation coming into law and the need to adopt a Water Services Delivery Plan, means no council in New Zealand has had the time to form a joint committee.

What are our options?

Option 1 (Council's Preferred Option) - A Water Services Organisation jointly owned by Horowhenua District Council, Palmerston North City Council, Manawatū District Council, and Kāpiti Coast District Council.

This option is the most affordable for our community.

Option 2 - A Water Services Organisation jointly owned by all willing councils from the Manawatū Whanganui and Kāpiti regions.

One or more of the other councils may decide that they do not want to be a part of a joint Water Services Organisation with us. If this happens, our Council needs to decide whether we still want to go ahead and form a Water Services Organisation with the remaining councils that agree to.

An example of this option could include Horowhenua District Coucnil partnering with Palmerston North City Council to form a jointly owned Water Services Organisation.

Option 3 - Status quo (financially constrained) If water remains in-house:

Legislation requires us to include the status quo as an option, however Council doesn't believe this option is finanically sustainable.

This option is the most unaffordable for ratepayers. It would see Council continue to manage and deliver the district’s water services. However, this option will become more challenging with increased economic regulation and challenges of ensuring we are providing essential infrastructure for growth.

While under our current financial and infrastructure strategies, we are just able to deliver the growth infrastructure in time and maintain our programme of renewing and maintaining our assets, we would have limited borrowing which would place more pressure on council's ability to invest in other activiites like roading, rubbish and facilities.

How do the options compare?

Privacy Statement

All submissions made are publicly available on our website and at Council service centres. Your personal details (including name and contact details) will be provided in their entirety to Elected Members and made available to the public at our office and on our website, unless submitters request that this information be kept private. We collect your contact information so we can keep you up to date with the proposal.

For more information, see our privacy statement on www.horowhenua.govt.nz/PrivacyStatement