Waikato Water Done Well

It is the Government's approach to improving the management of drinking water, wastewater, and storm water (the "three waters") services.  It replaces the “three waters” model of the previous Government. It states that:

• water service delivery must be financially sustainable and ring-fenced (put aside specifically for water services and cannot be used for anything else).
• new regulations/standards will be met.
• there must be clarity on how all three waters will be provided in the future in a way that best meets the above (up to at least 10 years).

Waikato Water Done Well aligns with the Government’s Local Water Done Well approach. It is a proposed jointly owned company (called a “CCO”) that has participating councils as shareholders. It involves South Waikato, Matamata-Piako, Hauraki, Ōtorohanga, Waitomo, Waipā and Taupō District Councils. An independent Board is appointed by the shareholding councils. It is a legal requirement that the Board is independent. The councils each make up a shareholders’ forum that advises the Board.

• Affordability: It is the most affordable option, with lower rate increases than other models.
• Efficiencies of scale: Consolidating water services across multiple councils helps reduce costs and improve service delivery.
• Improved environmental outcomes: The CCO can better meet climate change goals and regulatory requirements.

Under new requirements expected of councils for water services, costs are going to go up. It does not matter whether this is a standalone council business unit or a CCO.  Under LWDW, water and wastewater services costs (construction, maintenance, treatment, delivery) need to be ring-fenced and on charged directly to customers. This is a requirement of the Government’s Local Water Done Well approach. Each council will feel the impact of these increased costs differently.

Legislation requires us to consider affordability as one of the things that prove the financial sustainability of the CCO. There’s no official definition of affordable water costs in New Zealand, but international guidelines suggest affordability can become a challenge when the cost of drinking water and wastewater services exceeds 2% of a household’s income.

Affordability in the WWDW model is achieved through creating efficiencies of scale (which is the cost advantages a company gains by increasing its production scale, leading to lower average costs per unit as output rises).

Under WWDW councils (and their respective governing bodies) retain local control by

being joint shareholders in the CCO, writing the Statement of Expectations and the CCO referring significant decisions to its shareholders. Local control over assets is maintained because the councils themselves own the CCO. Councils cannot sell or transfer their ownership in the CCO. Privatisation is not possible under the CCO model.

The status quo is not an option for councils to choose under central Government’s requirements.     Even with an in-house model (keeping waters as a stand-alone council deliverable), the new requirements under Local Water Done Well mean that would be different.

Councils will retain their existing relationships with iwi and hapū and existing partnership arrangements within councils will be respected and maintained.

Currently the costs to establish a new legal entity are $2m and shared across the seven councils. However, as shareholders in the CCO they can pass much of this cost onto the CCO (the CCO will have a debt to each council). The CCO will repay the councils once it is generating its own revenue.

The new model will allow the CCO to borrow more money to fund necessary infrastructure projects, such as upgrading aging pipes and treatment plants. The CCO has a higher borrowing capacity than the Council currently does, which means there will be more funding available for infrastructure improvements.

Yes, as a shareholder in the CCO, South Waikato will still have a voice in decisions about water services through a statement of expectations. This ensures the Council can guide the CCO’s priorities and actions, while still benefiting from the efficiencies of a regional model.

Water will still flow from your tap, and your toilet will still flush! The main change will be that after the transition, you would receive your water and wastewater bills directly from the CCO, instead of the Council. The services themselves won’t change, just the provider

No, under the Waikato Water Done Well model, water services would be managed by the CCO, although the Council would remain a shareholder and still have a say in decision-making. The status quo option, where the Council continues to manage water services directly, is no longer considered financially viable in the long term.

Currently, stormwater services are not part of the LWDW policy. While the exact future for stormwater services is not yet determined, one possibility is that the Waikato Water Done Well CCO could also manage stormwater services in the future, depending on what is best for the community.

Councils are required under the new waters legislation to consult on a preferred option. In SWDC’s case this will happen between 14 April-5 May 2025. Full details of how to have your say are available on all of Council’s digital platforms as well as hard copies of material being available at Council facilities. Waikato Water Done Well is our preferred option and will be consulted on alongside the status quo. We encourage everyone to share their feedback on the proposed changes.