Delivering safe, high quality, well-maintained drinking water, wastewater and stormwater to our communities is crucial for protecting our environment, supporting public health, and enabling sustainable growth, while meeting our regulatory responsibilities.
Like many councils, we face significant future funding challenges for waters infrastructure. This is a national issue, and the Government is introducing new requirements for councils as part of its Local Water Done Well policy to address this.
We have to make some big decisions about how water services will be delivered to our community in the future.
Under new legislation all councils are required to follow stricter rules for managing finances and ensuring the quality of drinking water, wastewater and stormwater services, known as 'three waters'.
We’re now on a tight timeframe set by the Government to decide our preferred option for the future delivery model for water services.
We’ll be formally consulting with you in April 2025 and your feedback will help us develop our Water Services Delivery Plan which we need to have sorted in September 2025.
Local Water Done Well
- What is Local Water Done Well?
Local Water Done Well (LWDW) is the Coalition Government’s plan to address Aotearoa New Zealand’s long-standing water infrastructure challenges. It replaces the previous government's Three Waters Reform programme but seeks to achieve similar water outcomes. It recognises the importance of local decision making and flexibility for communities and councils to determine how their water services will be delivered in the future.
Like all local authorities across the country, Whakatāne District Council needs to determine what LWDW means for us as we work towards preparing a Water Services Delivery Plan (WSDP) and submitting it to the Department of Internal Affairs by September 2025. This Plan must provide a long-term assessment of our water infrastructure, how much we need to invest, and how we plan to finance and deliver it through our preferred water service delivery model. We must show we can deliver water services that meet regulatory requirements, support growth and urban development, and are financially sustainable.
A key feature of LWDW is providing councils with the flexibility to determine the optimal structure and delivery method for their water services. There are a number of broad options available, including:
- the council providing services itself, directly (‘in house’)
- transferring responsibility to a water organisation, established by the council or in which it is a shareholder
- a contract with a third party (including a water organisation) to provide water services on behalf of the council
- a joint arrangement with other councils (a “joint water service provider arrangement”)
- another type of arrangement that is consistent with the Act.
We are a long way from any change to the way we deliver our day-to-day water services. We don’t yet know whether we will be a standalone organisation or partnered with others, but we have got time to get it right. We'll be asking you for your feedback on our preferred approach next month (April 2025) before submitting our Plan in September.
- Local Water Done Well Bill
In February 2024, the Government introduced and passed legislation to repeal previous legislation relating to water services entities - the Water Services Acts Repeal Act repealed the Water Services Entities Act 2022, Water Services Legislation Act 2023 and the Water Services Economic Efficiency and Consumer Protection Act 2023.
The Act reinstated previous legislation related to the provision of water services (including local government legislation). This allowed continued council ownership and control of water services, and responsibility for service delivery.
The Local Government (Water Services Preliminary Arrangements) Act 2024 establishes the Local Water Done Well framework and the preliminary arrangements for the new water services system. It was enacted on 2 September 2024. It lays the foundation for a new approach to water services management and financially sustainable delivery models that meet regulatory standards.
Key areas included in the Act are:- Requirements for councils to develop Water Services Delivery Plans by 3 September 2025
- Requirements that Plans outline future water services delivery arrangements, and for councils
to commit to an implementation plan - Requirements for councils to include in their Plans baseline information about their water
services operations, assets, revenue, expenditure, pricing, and projected capital expenditure,
as well as necessary financing arrangements, as a firststep towardsfuture economic regulation
Streamlined consultation and decision-making processes for setting up future water services
delivery arrangements - Interim changes to the Water Services Act, which mean the Te Mana o te Wai hierarchy of
obligations in the National Policy Statement for Freshwater Management (NPS-FM) will not
apply when the Water Services Authority – Taumata Arowai sets wastewater standards.
In December 2024, The Local Government (Water Services) Bill was introduced, and it will establish the enduring settings for the new water services system. The objectives of the Bill are to ensure water services are safe, reliable, environmentally resilient, customer responsive and delivered at the least cost to consumers and businesses. There is a separate report in this agenda on this proposed legislation.
Context
- The national picture
Major structural change to the delivery of water services nationwide has been a focus of local and central government for some years. A water contamination issue in Havelock North in 2016 was the catalyst for Government review and inquiry.
A two-stage Government inquiry was held, the first stage focused on identifying the direct causes of the outbreak, the second looking at the wider regulatory context and ways to reduce the likelihood of another outbreak in the future.
The inquiry found widespread systemic failure of water suppliers to meet the high standards required for the safe supply of drinking-water to the public.
In mid-2017 a Three Waters Review, in parallel to the Inquiry, raised further questions about how effective the existing regulatory framework and about the capability and sustainability of New Zealand’s water service providers. Later work identified massive funding shortfalls in waters infrastructure provision, with initial estimates of $185B over 30 years.
Between 2020 and 2022 the Labour-led Government introduced new water regulations, a new regulatory body (Taumata Arowai) and structural changes to delivery – creating new entities to take over water services delivery from councils.
Following the 2023 elections, the new National-led government repealed legislation relating to service delivery, replacing it with its Local Water Done Well policy. Councils were required to put the costs of waters back into their LTPs. This has had significant rating impacts for many councils.
In early 2024, Government announced councils (or groups of councils) are required to prepare a Waters Plan for DIA approval. This plan will include 10-year high-level projections for future provision of water services, with a detailed three-year plan.
Enabling legislation in 2024, and in 2025 will provide options for CCO arrangements and establishment of economic regulation.
- The local picture
Key challenges for Whakatāne District's water infrastructure:
- In the near future we need to start renewing consents for several wastewater and drinking water treatment plants that don't meet current standards. These plants will need to be replaced or upgraded to keep being used.
- These challenges require significant investment over the next 30 years, which ratepayers will struggle to afford. The costs are higher due to modern standards and climate change resilience.
- Consistently meeting the NZ Drinking Water Standards, for all nine of our drinking water schemes.
- We manage approximately 957km of underground pipes conveying wastewater, drinking water and stormwater across the district. There are 18 wastewater and drinking water treatment plants and 94 pump stations.
- Whakatāne is a large Council by area (433,000ha), compared to its population (37,150). Maintaining and upgrading water infrastructure is difficult as it’s spread over a large area and there are few people to share the costs.
- Three waters infrastructure across Whakatāne District is relatively old, with 43% of underground pipes being over 50 years old and needing replacement in the next 30 years.
- Significant investment is required to replace these pipes and address failures between now and their replacement.
- Future generations will face increasing costs if investments are delayed.
- Expected growth in Whakatāne District will increase the need and demand for reliable water services infrastructure. This growth will require substantial investment in infrastructure upgrades and new developments, leading to higher costs. Effective planning is essential to ensure sustainable and cost-efficient water services for the future.
Further information
- What's happening?
- We have to make some big decisions about how water services will be delivered to our community in the future.
- Under new legislation all councils are required to follow stricter rules for managing finances and ensuring the quality of drinking water, wastewater and stormwater services, known as 'three waters'.
- We’re now on a tight timeframe set by the Government to decide our preferred option for the future delivery model for water services.
- We’ll be formally consulting with you in April 2025 and your feedback will help us develop our Water Services Delivery Plan which we need to have sorted in September 2025.
- What does this mean for councils?
There will be new rules for investment, borrowing, and pricing, along with new options for delivering water services. Councils in New Zealand must create a Water Services Delivery Plan to show how they will meet new water quality and infrastructure standards while being financially sustainable. The plan must outline the future service delivery model and prove it can meet new standards by June 2028.
- Why are changes being planned for water services?
High quality water services are crucial for protecting our environment, supporting public health, and enabling sustainable growth, while meeting our regulatory responsibilities. Like many councils, we face significant future funding challenges for waters infrastructure. This is a national issue, and Government has introduced new requirements for councils as part of its Local Water Done Well policy.
These law changes place new requirements on the way councils deliver water services. Councils (or groups of councils) must have an approved water services delivery plan in September 2025. Further new laws provide options for CCO arrangements and new economic regulation of water services. Additional funding (via the Local Government Funding Agency) is available for water services organisations which meet government requirements and for high growth councils.
- How did we get here?
In February 2024, the Government introduced and passed legislation to repeal previous legislation relating to water services entities - the Water Services Acts Repeal Act repealed the Water Services Entities Act 2022, Water Services Legislation Act 2023 and the Water Services Economic Efficiency and Consumer Protection Act 2023.
The Act reinstated previous legislation related to the provision of water services (including local government legislation). This allowed continued council ownership and control of water services, and responsibility for service delivery.
The Local Government (Water Services Preliminary Arrangements) Act 2024 establishes the Local Water Done Well framework and the preliminary arrangements for the new water services system. It was enacted on 2 September 2024. It lays the foundation for a new approach to water services management and financially sustainable delivery models that meet regulatory standards.
Key areas included in the Act are:- Requirements for councils to develop Water Services Delivery Plans by 3 September 2025
- Requirements that Plans outline future water services delivery arrangements, and for councils
to commit to an implementation plan - Requirements for councils to include in their Plans baseline information about their water
services operations, assets, revenue, expenditure, pricing, and projected capital expenditure,
as well as necessary financing arrangements, as a firststep towardsfuture economic regulation
Streamlined consultation and decision-making processes for setting up future water services
delivery arrangements - Interim changes to the Water Services Act, which mean the Te Mana o te Wai hierarchy of
obligations in the National Policy Statement for Freshwater Management (NPS-FM) will not
apply when the Water Services Authority – Taumata Arowai sets wastewater standards.
In December 2024, The Local Government (Water Services) Bill was introduced, and it will establish the enduring settings for the new water services system. The objectives of the Bill are to ensure water services are safe, reliable, environmentally resilient, customer responsive and delivered at the least cost to consumers and businesses. There is a separate report in this agenda on this proposed legislation.
- What triggered these legislative changes?
New Zealand's recent water reforms aim to ensure safe drinking water and better wastewater and stormwater management. The 2016 Havelock North incident, where 5,500 people fell ill and four died from contaminated water, exposed serious issues with water infrastructure and safety standards. This event prompted the government to push for stricter regulations to ensure safe drinking water nationwide.
- What is the focus of Local Water Done Well?
The focus of Local Water Done Well is on Councils voluntarily working regionally on what future water service solutions could be for them.
- What are the key components of Local Water Done Well?
- Fit-for-purpose service delivery models and financing tools ensuring water services are financially sustainable.
- Introducing greater central government oversight, economic and quality regulation.
- Local Water Done Well is being implemented in three stages, each with its own piece of legislation:
- Repeal of previous water services legislation.
- Establish framework and preliminary arrangements for the new water services system.
- Establish enduring settings.
- Why are Water Services Delivery 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.
- What options do we have?
- 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
In responding to the direction outlined in the Local Government (Water Services Preliminary
Arrangements) Act 2024 and the proposed Local Government (Water Services) Bill the District’s
Three Waters activities have been analysed and reviewed potential options shortlisted for future water service delivery in line with the legislation.This assessment highlighted some challenges for Whakatāne District in relation to the
Government’s financial sustainability requirements, as identified in the legislation. The challenges
that were identified were:- The challenge of investment sufficiency, with funding for anticipated upgrading of Wastewater
Treatment Plants deferred until years 11 to 15 of the LTP 24-34. - The challenges with revenue sufficiency, where the revenue for Three Waters does not fund
the investment required.
Regarding potential options for future water service delivery, two options were identified for further
investigation. They are:- The establishment of an Internal business unit (with shared service arrangements)
- A sub-regional or regional Council Controlled Organisation (CCO)
- 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:
- 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.
- If a decision is made to change our current service delivery model, when would that change happen?
If, following consultation, a decision is made to change the delivery services structure, new arrangements are likely take some time to implement. It is anticipated any implementation would commence after 2026.
- Will the legislation affect the water services I receive?
We will continue to provide quality services to residents and ratepayers.
- Can I expect an increase in how much I pay for water services?
Over time, the price to deliver water services across all New Zealand councils will increase, including in Whakatāne District, regardless of whether council changes its service delivery model or not. Whatever we do, we want to manage and minimise those costs for our community as best we can.
- What is a council-controlled organisation (CCO)?
A CCO is an entity that is controlled by a local authority, or multiple local authorities, through shareholdings. They are governed by their own boards but are still accountable to the council that controls them through a very important document called a Statement of Expectations.
- What are the next steps?
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. Iwi partners and stakeholders will be engaged with, and we’ll be asking the community for feedback in April 2025.
Developments in this space will be ongoing as discussions evolve with Elected Members and the community. Keep an eye out for more information, including your opportunity to have your say on how we continue delivering water for Whakatāne.
- How do I have my say?
All councils must undertake a simplified community consultation process to gauge public sentiment towards the water service delivery models that each council is considering. We will be asking the community for feedback in April 2025. Of note, this consultation is not a vote or referendum. It will be up to Elected Members to decide which model they proceed with.
Whakatāne District Council is yet to formalise the options to be consulted on, however two options have been shortlisted. Read more about this here »»
Media
- Whakatāne District Council explores future of water services
As councils across New Zealand deliberate on the future delivery of drinking water, wastewater and stormwater, the Whakatāne District Council has taken the next step towards ensuring sustainable and efficient water services for the community.
- What's up with water? Introducing 'Wai - It Matters'
Whakatāne District Council is lifting the lid on the full journey of water - from source to tap and back again. 'Wai - It Matters' is an education campaign designed to help the community better understand the essential work required to deliver clean drinking water, manage wastewater, and future-proof stormwater systems.
- Support signalled for collaborative approach to future water services delivery
The Whakatāne District Council has signalled its willingness to collaborate with other councils through a Council Controlled Organisation (CCO) for the future delivery of water, wastewater and stormwater services.
Read the full release »
Wai - It Matters
- 'Wai - It Matters' education campaign
- Image
'Wai - It Matters' is an education campaign designed to help our communities better understand the essential work required to deliver clean drinking water, manage wastewater, and future-proof stormwater systems.
While water is essential to daily life, many people don’t often consider how it reaches their taps, where it goes once flushed away, or how stormwater is managed.V The campaign takes a deep dive into the critical infrastructure, skilled teams, and regulatory processes that keeps water flowing in the Whakatāne District.
Understanding the scale and importance of the district’s water networks is more crucial than ever, with big changes ahead for New Zealand’s water services. As we navigate these changes in how water services are managed, we want our community to be well-informed about how water services work, and what the future may hold.
The 'Wai – It matters campaign' offers an opportunity to learn about the journey of water before formal consultation begins in April, when the public will have the chance to wade in on their thoughts about water services.
Wai - It Matters - Drinking Water »»
Wai - It Matters - Hinemoa Stormwater Upgrade and Relocation Project »