What is “Local Water Done Well”?
Local Water Done Well is the government’s new way of addressing the significant water infrastructure challenges across the country and replaces the previous Labour government’s Three Waters Reform programme.
New legislation applies to all water service delivery – water supply, wastewater, and stormwater – with the aim to ensure every community has access to safe, reliable, and sustainable water services. It also keeps assets in public ownership and lets each council decide the best option to deliver water for its community.
Regardless of what model we choose, it also introduces more regulations (rules and standards) that need to be met, and this will increase the cost of water services. Affordability of our water infrastructure, while maintaining high standards for public health and our environment, is our focus for the future.
To make sure we choose the water service model that is right for Tauranga City we have carried out an evaluation of the advantages, disadvantages, and trade-offs of potential options.
In December 2024, a business case on the future for water service delivery was considered by Council. The purpose of the business case was to assist the Council to develop a response to Local Water Done Well and to recommend a proposed way forward so we can consult with you. We have also assessed the impacts on rates, council borrowing, levels of service, and potential costs for households.
Local Water Done Well business case (19mb pdf)
Through the business case process we identified three options with one being our proposed model.
The three options
Key points to note about our proposal for a multi-CCO:
- A CCO results in lower water charges than continuing with the current in-house arrangement.
- Community affordability improves slightly under the CCO model.
- The positive efficiencies continue to compound beyond 2034 and therefore there will be even greater savings in the water charge beyond 2034.
- The efficiencies also mean that there will be more infrastructure delivered under the CCO for the same level of capital programme investment under an in-house arrangement.
- The larger the CCO the greater the cumulative savings over time (i.e., higher peak savings).
- Overall, a CCO model has a small to moderate amount of increased debt capacity. This would enable more investment in waters (a CCO) and Council’s non-waters infrastructure and, together with efficiency savings to capital delivery, this would enable more investment to be delivered to communities for the same cost.
What is a waters CCO?
A Council-Controlled Organisation (CCO) for water services is owned by one council, or multiple council which share ownership. The CCO manages water assets and operations but with oversight from councils as well as government regulators. The community still own the assets through the councils.
How will we decide who to join with in a multi-CCO?
We will be checking to make sure all partners benefit from joining together. Any change will need to be fair and equitable and risks will need to be identified and managed. This will include agreeing to ringfencing all costs, debt and revenue for each council for the first 5 to 10 years (‘ringfencing’ means that water finances would be kept separate for all shareholding councils for 5-10 years, so communities still pay their own way). Any change to ‘ring fencing’ will be by way of a specific resolution of Council.
How will we ensure that a multi-CCO is delivering the right thing for Tauranga City?
There will be checks and balances along the way to make sure community interests are protected and that the councils have oversight of the multi-CCO. Councils will set expectations and performance targets for the CCO, which then creates a strategy to meet these goals. Where there is more than one council as shareholders, there is only one set of expectations and performance targets for the CCO (that councils must agree on).
Who should manage and make decisions about how water services are delivered in the future?
View options table (43kb pdf)
Consultation document (5.3mb pdf) Summary document (56kb pdf)
Will the legislation affect the water services I receive?
No, your current water, wastewater and stormwater 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 community. This includes working with other councils to consider the best way forward. To create a multi-CCO, we would need to confirm this would be mutually beneficial for all parties.