FAQs
The Government repealed the previous Labour Government's Three Waters legislation (also known as Affordable Waters).
The Government's replacement policy is titled "Local Water Done Well." This approach emphasises restoring local council ownership and control of water assets.
Ownership: Retaining water assets under the ownership and control of local councils or remain in public ownership through council/s’ shareholding in a water services organisation/joint water services organisation
Funding and financing: Providing councils with a range of structural and financing tools, including the option to establish water services organisations
The Government has announced reforms to the Infrastructure Funding and Financing Act (IFFA) to expand its scope and provide more certainty for investors and developers in infrastructure projects, potentially including water service providers under the "Local Water Done Well" framework
The Commerce Commission is expected to implement an economic regulation regime for water services after the relevant legislation is passed. This regime aims to promote investment, ensure sufficient revenue for providers, and monitor the efficient delivery of services
Funding: The Government has enabled councils to access debt funding (borrow) to invest in water infrastructure but has not provided a solution to the funding question (like sharing a percentage of the tax revenue which formed part of the Government election campaign announcements), the extra funding investment (borrowings) which is now being accelerated and will be at the cost of the consumer.
How are three waters services delivered now?
Your three waters services are delivered in-house with only a small amount of specialist expertise purchased on an as-need basis.
What has changed?
Transformational change has been mandated because water services in much of New Zealand are suffering longstanding and serious performance challenges, mainly due to a lack of sufficient investment over a long, long period. Councils need significant and sustained investment over coming decades to fix water networks, which are at risk of poor performance or critical failure in places. Urgent attention is also needed to enable new housing growth, provide safe drinking water, improve environmental water quality and enhance resilience.
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.
The Government ran on a platform of repealing Three Waters (and Affordable Waters) and promised to address the ownership, funding and financing challenges, what has happened?
Why can’t things stay the way they are (status quo)?
Much of New Zealand has significantly underinvested in infrastructure generally and water infrastructure is no exception. Councils and their communities around the country now face stark challenges to meet the investment needed to ensure safe and reliable drinking water, wastewater, and stormwater compliance.
Is this a step towards privatisation of New Zealand’s water assets?
No. Under Local Water Done Well, the Government has committed that water services will remain in public ownership. Councils and water organisations will not be able to privatise water services. The Local Government (Water Services) Bill states that a water organisation must be owned by a council (or councils) and/or a consumer trust.
Additionally, the Bill introduces a range of restrictions against privatisation. For example, it is proposed that a water service provider may not use water assets as security on a loan.
Privatisation would require a new Act of Parliament.
What is price harmonisation?
Price harmonisation (in the context of a multi-council water services organisation) is effectively a uniform charge for service(s) received. Initial modelling was harmonised, but at the request of some members of the proposed water services organisation, non-harmonised charges have been proposed. Non-harmonised means that consumers of one district are not subsidising consumers in another district. There is no guarantee that the water services organisation will not harmonise prices immediately, or at some point in the future. Both an internal water services unit and a multi-council water services organisation will be responsible for setting their own tariff structures.
Under the preferred option for an internal water services unit, will the ratepayers get two bills, one for rates and one for water?
No, if the internal model is what we decide to do, you will get your normal rates notice with the charges for water, wastewater and stormwater clearly identified.
Yes, if we decide to form or join a multi-council water services organisation, the proposed water organisation would have a direct relationship with customers. Property owners will no longer pay for water services in council rates bills and instead the new water organisation will invoice property owners directly, much like gas, phone or power companies do.
If we become a member of a water services organisation, how can we keep the new organisation accountable and influence its direction for the people of the Waimate District?
The new legislation is proposing that the councils who own the new organisation will be able to influence the direction of the new water organisation through a statement of expectations, the ability to comment on and potentially modify the water services strategy that the water organisation prepares and board appointments.
The option of a water services organisation involves transferring ownership of the councils’ water supply network assets to the new water organisation. Councils Significance and Engagement Policy defines strategic assets which includes regional bulk water supply network including storage facilities, treatment plants, pipelines and water supply catchments.
The Shareholder Statement of Expectations would inform the water organisation’s long-term water services strategy (prepared every three years), which will outline how they plan to deliver on these expectations and priorities, and their intended approach to pricing and charging consumers.
The water organisation will be required to provide an annual report to the shareholding councils. The shareholding councils will have the power to require the organisation to provide additional reports such as an asset management plan or quarterly reports, if they wish. The shareholding councils will appoint directors to the board of the water organisation and will be able to remove directors or decide not to renew their appointments.
Under the multi-council water services organisation model, councils will need to introduce ways to converse with communities on water needs and concerns, so that can be fed into the statement of expectations.
At a minimum, the new water organisation will be required to prepare an annual budget and performance report to the owning councils (shareholders). It is highly likely that the owning councils will require more frequent performance reporting to ensure a strong focus on quality customer service, delivery and management of assets.
In addition, any consents issued under the Resource Management Act will be monitored and enforced by Council and ECan. This will include consents to use water, take water and discharge into water. Non-compliance will be investigated and dealt via the usual regulatory processes.
Why are the three councils consulting at the same time but separately?
Waimate, Mackenzie and Timaru District Councils are consulting on Local Water Done Well reform options around the same time. The three councils have each identified two options to consult on being a multi-council water services organisation and an internal water services unit.
Government legislation requires each council to consult with their communities on the planned changes to water services delivery. It is critical that consultation is carried out in line with legislated requirements to ensure the Government’s key deadline of 3 September 2025 can be achieved.
Why did Timaru and Mackenzie District Councils have their preferred option as a multi-council water services organisation and Waimate an internal model?
Mackenzie and Timaru District Councils selected a multi-council water services organisation as their preference and Waimate District Council selected the internal model. There are many influencing factors, one is the fundamental difference in district landscapes and primary activities: Waimate is a rural support council; Timaru with high-value commercial, light and heavy industrial growth; Mackenzie being a rural support council with added high growth tourism challenges.
Another key factor is that Waimate District Council strongly believes in localism and already provides your three waters services in-house with a large portion of this activity already ring-fenced.
If WDC moves ahead with an in-house model, can we join a water services organisation in the future?
Yes.
How will this affect the cost of water services and impact ratepayers?
While we've made some very good investment decisions in the past 10 years 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?
Increased costs to demonstrate our compliance to the new economic regulator. Increased project and operating costs to comply with new water quality regulations and accelerated investments.
Can the water organisation raise prices without Council approval?
Yes, but an economic regulator (Commerce Commission) will monitor pricing to ensure affordability and fairness.
Will the water organisation review the pricing structure?
Yes, the water organisation may review its pricing structure. They could explore a model that would involve a fixed base price for water delivery, with additional charges based on usage through water meter reading in urban areas and a unit-based system for rural water consumption. Our in-house ringfencing structure provides us with greater control and flexibility in developing a more equitable and sustainable pricing framework."
What is the role of iwi/hapū?
Different councils have different relationships with local iwi/hapū, and currently all councils work directly with the tangata whenua of their own areas. Local Water Done Well has been a very fast process under very tight timeframes. While councils have been keeping iwi/hapū informed, there haven’t been discussions at this stage about where iwi/hapū would have a role in any water organisation.
Regardless of how water services are delivered or who delivers them, legislation requires that the principles of the Treaty of Waitangi are upheld.
If smaller councils and communities decide to go with a multi-council water services organisation will this position the remaining council to the possibility of full amalgamation?
While establishing a multi-council water services organisation wouldn't automatically trigger a full amalgamation, it could certainly increase the possibility or make it a more logical and perhaps even inevitable step down the line.
In Waimate, every $100 of rates $27 is dedicated to water, wastewater and stormwater costs compared to $20.70 for roads and footpaths. (Note: Roads and footpath activities attracts a 68% subsidy from the New Zealand Transport Agency which makes it a much larger budget item) so transferring three waters assets into a water services organisation is very significant in terms of loss of core activity.
Once small councils transfer their three waters assets and staff questions will arise around relevance and capacity of the remaining council. This is an issue that needs careful consideration as some communities may, in the long-term lose their local voice.
Why are Mackenzie and Timaru District Council’s joint water services organisation connection costs different to Waimate District Council’s?
This is because each council has disclosed “average” connection costs based on non-harmonised pricing (i.e. not uniform charges over the three Councils) therefore reflecting the different types of challenges and customers for each area. For example, Waimate has a large rural consumer base, with varying volumetric ranges as disclosed in the consultation document (page 15), whereas Timaru has a large industrial consumer base, and Mackenzie has a mixture of urban/rural and commercial reflective of tourism.
Does Council intend to fluoridate our water?
Waimate District Council wishes to address recent discussions and potential proposals regarding the introduction of fluoride into our district's water supply. After careful consideration of the available information, community feedback, and potential implications, Waimate District Council confirms that it does not support the introduction of fluoridation currently. However this is a matter of public interest, and we encourage residents to stay informed through reliable sources. In New Zealand, many council water supplies are fluoridated to help prevent tooth decay. The Director-General of Health can direct local authorities to add fluoride to their water supplies, and some local authorities also choose to fluoridate voluntarily.
What is the point of consultation? Will our feedback matter?
Councils are required to submit a Water Services Delivery Plan to the Government by September 2025. As part of that plan we are required to have consulted on what the options are and what Council’s preference is, so the answer is yes. This is a major decision and your feedback will have a considerable influence on Council’s final decision.