Local Water Done Well

The Northland Local Water Done Well Working Group has agreed to a model that recognises the different starting points of each council in terms of water assets, debt levels and infrastructure investment needs.

This would be achieved by keeping financials ring-fenced for each district and having non-harmonised water charges for up to three years. Non-harmonised means water charges are different for residents in each district.

The exact details of this model are still to be worked through. It is expected that during the first three years, the CCO would be able to identify and prioritise some of the critical issues each district is facing and then be in a position to review its approach to finances and water charges.

This is yet to be confirmed, however, legislation provides five options for how shares can be allocated across councils. These include:

1.      Population allocation: Shares are allocated based on the proportionate population of its service area and updated as these figures change over time.
2.      Connections allocation: Shares are allocated based on the number of water connections and updated as these figures change over time.
3.      Net asset allocation: Shares are allocated based on the total net value of the council’s assets transferred to the CCO at the time of establishment.
4.      Equal proportion allocation: Shares are allocated to each council equally.
5.      Combination: Shares are allocated through a combination of the methods above. For example, 50% of the shares could be allocated based on number of water connections and 50% based on net asset value.

Local Water Done Well legislation requires the appointment of a competency-based board of directors. Board members would be selected for their expertise in areas such as strategic planning, financial management, governance, leadership, risk oversight, and water industry experience. The board would have ultimate responsibility for the decisions and actions of the CCO, subject to any agreements or contracts established during its establishment.

The proposal for Northland also includes a recommendation that a shareholder council be formed, including two representatives from each founding council, of which at least one must be an elected member. The shareholder council’s role would be to represent its shareholders and hold the CCO to account via a statement of expectations.

This proposal is limited to amalgamating drinking water and wastewater services across Northland.

The legislation allows for councils to exit the CCO under particular circumstances, however, this would be a challenging process if the CCO has already been established.

Water Services Delivery 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. As part of Local Water Done Well, councils across New Zealand must 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. Councils must submit their Water Services Delivery Plan to the Secretary for Local Government by September 2025.

More information about what is required to be included in the plan can be found at: www.dia.govt.nz/Water-Services-Policy-and-Legislation 

Local Water Done Well (LWDW) is new legislation introduced from central government aimed at addressing    New Zealand’s long-standing water infrastructure challenges. It paves the way for services and assets to be retained by council while offering new options for delivering water services and funding water infrastructure.

There are three key components of Local Water Done Well:
• Fit-for-purpose service delivery models and financing tools
• Ensuring water services are future-proofed and financially sustainable
• Introducing greater central government oversight, economic and quality regulation

All councils have been tasked by the Government to consider how they can best provide water services in the future, whether it is on their own, or joining up with others to create scale that can drive efficiencies. Regardless of what service delivery model councils choose, meeting new economic, environmental, and water quality regulatory requirements is a bottom line for the Government. You can read the legislation at: www.dia.govt.nz/Water-Services-Policy-legislation-and-process 

Stormwater assets are expected to remain with their respective councils in terms of decision making and costs, however, a shared service arrangement could be made with the CCO for operations. This is because many critical parts of the system are shared across other services too. For example, roads drain stormwater during heavy rain, and green spaces in parks and reserves are designed to capture excess water where possible.

No, your water services will not be affected. We will continue to provide quality services to residents and ratepayers as we look to explore the best service delivery model for the future of our community. This potentially includes working with one or more neighbouring councils. Our focus is to ensure residents continue to receive quality and value in their water services.

There would not be a ‘lead’ council, however legislation requires a secretariat role which could be fulfilled by a participating council, or the CCO itself. The secretariat role is yet to be determined.