FAQs

What is Local Water Done Well?

Local Water Done Well is the Government’s plan to address New Zealand’s long-standing water infrastructure challenges. It replaces the previous government’s Three Waters reform proposals.

It aims to:

👉Tackle New Zealand’s long-standing water infrastructure challenges by enhancing the quality, sustainability, and affordability of water services nationwide

👉Introduce new economic and quality regulations to improve service standards

👉Ensure water services are future-proofed and financially sustainable.

👉 Make water services delivery more effective and efficient.

Key components of Local Water Done Well include:

· 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 introduces changes to how water services are managed in the future. There are new rules for investment, borrowing, and pricing, and new options for delivering water services.

Local Water Done Well requires councils to choose a water services delivery model that will best meet their community's needs, provided it also meets financial sustainability and compliance standards.

It incentivises councils to collaborate, by allowing a jointly owned council-controlled water organisations to borrow more money specifically against three waters assets to invest only in water infrastructure. This allows councils to continue to invest in other key infrastructure areas more easily.

Under Local Water Done Well, all councils must:

· Meet new financial and regulatory requirements, ensuring water services are ring-fenced (i.e. the financial administration of water services must be kept separate from the rest of council).

· Invest in infrastructure to address long-standing issues.

· Set fair prices that reflect the cost of delivering water services.

· Develop a fit-for-purpose Water Services Delivery Plan by early September 2025 outlining how they will meet these requirements.

Plans are a requirement under the Local Government (Water Services Preliminary Arrangements) Act

The plans are a ‘one-off’ way for councils to reflect on their current approach to the delivery of drinking water, wastewater, and stormwater services and demonstrate their commitment to a future model that is financially sustainable and meets quality standards.

Water Services Delivery Plans:

· Must include detailed information about water services operations, assets, revenue, expenditure, pricing, future capital expenditure, and how councils plan to finance and deliver their preferred delivery model.

· Are for a minimum 10-year timeframe but can be up to 30 years. The first three years must be detailed.

· Must demonstrate how the water services will be financially sustainable by June 2028.

The Government can reject plans if they do not meet legislative requirements. If the Government is not satisfied with a council’s water services delivery proposal, it can also direct what councils should do.

Yes, all territorial authorities must prepare a Plan. This includes all district and city councils, and unitary authorities. It excludes regional councils. Councils can develop plans individually or jointly with other councils if they propose to deliver water services through a joint arrangement.

Financial sustainability means revenue from water services (the charges residents and businesses pay) is sufficient to meet the costs of delivering water services This includes meeting all regulatory standards and making long-term investments in water services.

How councils approach achieving financial sustainability can differ depending on local circumstances. Councils need to consider the balance between three key factors.

These factors are:

Revenue - is there sufficient revenue to cover the costs (including meeting debt repayment and interest charges) of delivering water services?

Investment – is the projected level of investment (in new treatment plants, replacement pipes etc) sufficient to meet levels of service, regulatory requirements, and provide for growth?

Financing – are funding and finance arrangements sufficient to meet investment requirements?

Yes! We will be consulting on our water service delivery proposals in early May. In the consultation document we will have:

· Our proposed service delivery model

· An analysis of three options, including the proposed option

· Potential impacts of proceeding or not proceeding with the proposed option, including on rates, debt, levels of service and any charges for water services

· The implication for communities, if the proposed option involves establishing, joining or amending a joint water services organisation