FAQs
Increased costs to demonstrate our compliance to the new economic regulator
Increased project and operating costs to comply with new water quality regulations
In-house business unit (our current delivery model)
Single council-owned council-controlled organisation (CCO)
A council controlled organisation (CCO) owned by the council and one or more of our neighbours.
Mixed council / consumer trust – a consumer trust established as the majority shareholder with one or more councils owning a minority of shares
Consumer trust – council assets would transfer to a consumer-trust owned organisation.
- Revenue sufficiency – is there sufficient revenue to cover the costs (including servicing debt) of water services delivery?
- Investment sufficiency – is the projected level of investment sufficient to meet levels of service, regulatory requirements and provide for growth?
- Financing sufficiency – are funding and finance arrangements sufficient to meet investment requirements? Further information about financial sustainability is available in the Guidance for preparing Water Services Delivery Plans.
What is the Government’s Local Water Done Well?
Local Water Done Well is the Coalition Government’s plan to address New Zealand’s long-standing water infrastructure challenges. It replaces the previous government’s Three Water proposals.
What was the catalyst for these legislative changes?
Recent water reform in New Zealand began to make sure everyone has safe, clean drinking water and to improve the way wastewater and stormwater are managed.
The Havelock North drinking water incident in 2016 was a major trigger for this work, when around 5,500 people fell ill and four people died after drinking contaminated water. This event exposed serious issues with New Zealand’s water infrastructure, safety standards, and the need for stricter regulation. It highlighted the risk of poorly maintained water systems, prompting the government to push for legislation changes to ensure safe drinking water nationwide.
What does this mean for city and district councils?
There will be new rules for investment, borrowing and pricing and new options for how we deliver water services.
City and district councils throughout New Zealand are required to formulate a plan (Water Services Delivery Plan) within a year to show how they will deliver water services that meet these new water quality and infrastructure standards while being financially sustainable in the long-term.
The Water Services Delivery Plan must say what service delivery model we propose to use in the future. It must show that the delivery of water services will be financially sustainable and can meet new regulatory standards by June 2028.
How will this affect the cost of water services, including to Horowhenua users/ratepayers?
While we've made some good investment decisions in the past about our three waters, we expect it will cost our ratepayers more in the long run to meet the new rules and regulations put forward by the government.
What are the extra costs?
What happens next?
The government has set a tight timeframe for the changes. The new rules mean councils will have to consult on their preferred delivery model in early 2025.
These are the options from the government:
We're considering the pros and cons of all these options, but when we consult in 2025 we're only required to set out two delivery options. We have to take a range of factors into consideration when we make a decision on how to move forward – including the financial impact on water users, community views, and the strategic advantages and disadvantages of each option.
If we do decide to join up with others we'll still get to make the decisions about how those joint arrangements will work.
Early next year we will formally consult the community about the proposals in our Water Services Delivery Plan before it's adopted.
Why are Water Services Delivery Plans (Plans) needed?
Plans are a requirement under the Act. Through the development of Plans, councils will provide an assessment of their water infrastructure, how much they need to invest, and how they plan to finance and deliver it through their preferred water service delivery model.
Plans are a way for councils to demonstrate their commitment to deliver water services that meet regulatory requirements, support growth and urban development, and that are financially sustainable.
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, and excludes regional councils.Plans can be developed by individual councils, or joint with other councils if they propose to deliver water services through a joint arrangement.
What information do Plans need to cover?
Plans will cover information across three key areas: financial and asset information, investment required, and service delivery arrangements. They must cover information about all water services (drinking water, wastewater and stormwater).
Section 13 of the Act outlines what information is required to be included in Plans. Section 14 of the Act outlines what additional information is required for joint Plans.
When do Plans need to be submitted?
Councils have 12 months from the date of the enactment of the Act to prepare and submit their Plans. Plans must be submitted to the Secretary for Local Government by 3 September 2025, unless an extension is granted.
What does financially sustainable water services mean?
Financial sustainability means water services revenue is sufficient to meet the costs of delivering water services. The costs of delivering water services include meeting all regulatory standards, and long-term investment in water services.
How councils approach achieving financial sustainability can be different depending on local circumstances and require councils to consider the balance between three key factors.
These factors are: