Local Water Done Well

Reform of water services has been ongoing for well over 10 years, and prior to the Havelock North incident in 2016, where 5,500 people fell ill and 4 died from contaminated water. This exposed serious water infrastructure issues across New Zealand and prompted significant legislative changes.

Average water charges per connection are forecast to increase from $2,398 in 2024/25 to $4,956 in 2033/34 (in nominal/inflated terms), representing around 4.8% of median household income.  These figures are inflated.

In today’s dollars, the 2033/34 is estimated at $3,949 not inflated.

More information can be found on Page 43 of the Water Services Delivery Plan (see Key Documents above).

Tararua District Council rates will no longer be used to charge for water services once the new organisation is able to start charging for its costs directly to its customers.  Rates will therefore reduce as the change is made and transferred over.

Tararua District Council was asked to put its worst-case scenario forward for the capital expenditure to meet government and operational requirements.

A letter was sent to the Minister of Local Government in July 2025 expressing our concern that the cost of Local Water Done Well is not affordable to our ratepayers. This has placed Council in a difficult position and means that reducing cost is essential, even if this means no longer being in direct control of water services.

Properties currently paying half charges for water/wastewater services may see changes under the proposed CCO model, with Commerce Commission oversight ensuring fair pricing.

No, pricing will remain separate (ring-fenced) for each district for nine years, then subject to review.

Any change would require unanimous decision by all councils.

The Commerce Commission will establish pricing plans and price-quality regulation to ensure fair prices and quality services for all water users.

Yes, the Long Term Plan includes allowance for meters on all lateral connections, to be installed at the toby (water connection point) over several years.

$150 million over 10 years for Tararua District, compared to less than $50 million over the previous 18 years.

This includes renewals, upgrades for compliance, and growth-related projects.

It's the Government's plan to address New Zealand's water infrastructure challenges within a new regulatory framework focused on economic, environmental and water quality needs.

Both the Labour and National led Governments have successively required councils to restructure the delivery of water services.

Labour mandated centralisation of services; National has allowed local Government to determine how this might best work.

The Councils are expected to reform and meet the requirements of financial sustainability while achieving quality standards compliance.

Tararua District Council's share is $1.25 million of the total $5 million establishment costs. This will be capitalised, borrowed, and transferred to the WSO at go-live.

The WSO will be overseen by a Stakeholders' Forum comprising council and iwi representatives, and governed by a Board of 5-7 independent Directors with specified skills requirements.

A formal agreement between the four councils and iwi that will be submitted as an appendix to the Water Services Delivery Plan, demonstrating regional commitment to establishing the WSO and confirming governance, shareholding, and commercial arrangements.

1) Repeal previous legislation

2) Establish framework

3) Establish enduring settings

Projected $212m in assets and $66m in debt by 30 June 2026.

Expected 12.2% savings over 20 years compared to a stand-alone model.

The WSDP conservatively assumes 4-6% efficiency gains based on international water sector reforms, compared to 17% assumed in consultation modelling.

Council is developing a back-up plan if a partner opts out (not anticipated). The standalone option is considered high risk and not financially sustainable.

Consultation used real numbers (today's dollars with GST), while the WSDP uses nominal (inflated) figures as required by DIA - resulting in numbers appearing 27.8% higher by year 10.

All district, city and unitary authorities (excludes regional councils).

If councils can't agree, DIA advises a Crown Facilitator can be appointed to assist with identifying solutions and broker/coordinate joint plans.

If councils can't deliver an acceptable WSDP, the Act provides powers to the Minister to facilitate arriving at an acceptable solution. Failure to comply would likely result in appointment of a water services expert at the council's cost.

The shift is from LGA depreciation funding to utilities infrastructure model - spreading debt over more years by funding renewals from loans.

Costs are divided by current and projected connected users for all three waters services, factoring existing/future service levels and growth.

Council brought the capital programme back in-house on 1 July 2025 to focus on delivery and prepare for transition. The Water Services Organisation will have flexibility to review and phase the regional capital programme, bundle work for efficiencies, and make operational decisions to manage costs.

Council delegates authority to the CE to make minor final changes to the WSDP before certification and submission, and prepare the Water Services Organisation Constitution and Shareholders' Agreement in line with commercial agreements in the Commitment Agreement.

Final versions will be brought back to Council for approval in September 2025, after the Chief Executive prepares them under delegated authority.

The model uses 5,398 average connections, adjusted from earlier figures to better reflect the actual charging system including scaled charges and remissions.

All internal borrowings will transfer to the new WSO and remain ring-fenced to Tararua pricing. The $1.25m establishment cost will be transferred as part of Council's water-related debt. Debt transfers progressively as existing Council debt matures.

Investment sufficiency (adequate investment for regulations and growth), Revenue sufficiency (enough revenue to cover costs), and Financing sufficiency (adequate funding arrangements).

The Water Services Organisation will reach the 10% Free Funds from Operations (FFO) to debt target by FY32, with Tararua meeting this by FY30.

Council is approving: the Water Services Delivery Plan for Tararua District Council and the regional Water Services Organisation; the Commitment Agreement as appendix; $1.25m establishment funding; WSO establishment by 1 July 2026 and operational by 1 July 2027; and delegations to the CE for finalisation.