The region’s four territorial authorities are set to take the next step in exploring a joint approach to delivering water services under the Government’s new Local Water Done Well plan.

After resolving to investigate joint ownership and delivery of water services in 2019, this work was interrupted by the previous Government’s Three Waters policy, which proposed to take ownership of assets away from councils. The councils agreed in August to revisit this joint work in the context of the new Local Water Done Well legislation, which aims to keep decision making and control over water assets local.

Napier Mayor, Kirsten Wise says Hawke’s Bay is at a crucial turning point for water services delivery, especially in light of the standards and investment requirements that will likely come with the new legislation.

“Whilst no decisions have been made, we continue to work closely together to explore options, including a jointly owned regional water entity which could bring benefits through scale that councils couldn’t achieve alone.”

Mayor Wise says as a starting point, councils have been assessing the current state of their respective water services, along with their ability to deliver the investments that will be required in the future under what will be much more stringent regulation.

Central Hawke’s Bay Mayor, Alex Walker says it’s a given there will be changes to how councils deliver, fund and plan water services.

“Whether we act as individual councils or as a region, things will look very different from next year onwards.

“The status quo will no longer be viable and early indications suggest it will be challenging for councils to continue delivering water services ‘in-house’.”

She says the new regulations focussed on ensuring suitability of water operations will require investment levels beyond what current Long Term Plans and borrowing limits provide.

Councils have the opportunity to manage this change proactively and minimise the costs for their communities.

“If we don't decide on a model by September 2025 and have a plan for it to be implemented by 2028, it may be decided for us,” says Walker.

The next step for councils is to analyse the options on the table and decide which one will best serve their communities and meet legislative requirements.

“There’s a lot of pressure on us to ensure we progress this significant piece of work at pace.

“This is substantial mahi that will leave a legacy for generations to come.”

Hastings Mayor, Sandra Hazlehurst says regardless of the path taken, councils (as water service providers) will have to meet clear minimum regulatory standards and financial sustainability requirements that will be set out in the final piece of Local Water Done Well legislation.

“This legislation is due to be introduced in December and will also bring with it the ability to access new financing options for specific council-controlled organisations focused on water.

“These financing options will be necessary because there is no sugar coating the fact that as a region, there are significant investment challenges ahead regarding water services delivery.”

She says the new economic regulation regime, overseen by the Commerce Commission, will ensure that rates or water charges collected by councils or Council-controlled organisations are ‘ring-fenced’ for water services.

Wairoa Mayor, Craig Little, says understanding local context within the region is important in the next stage of work, which includes analysing what a joint water services entity could look like.

“Ultimately, we know the Government reforms are going to force change one way or another and it’s our job to ensure we navigate this in the most sustainable and cost-effective manner for our ratepayers.”

He says a key driver for all councils is to ensure everyone in their communities has secure access to clean, quality water – both now and into the future.

“Proven cost savings, retaining local and institutional knowledge and service security are key factors as we move forward.”

Mayor Wise says councils are being asked to confirm the joint work should continue to the next stage.

“This will see the development of a business case detailing what a regional council-owned water services entity could look like financially, including the pricing benefits it could deliver ratepayers compared to other options.”

She says the decision this week is just about continuing the work – it is not a decision about preferred delivery models or whether a regional approach is the way councils will go.

“As we have said throughout, no decision will be made without the input of our communities and mana whenua.

“Under the current workplan, public consultation on options is likely to occur early in 2025. A key date driving this timeline is that councils – either individual or jointly – must submit a plan for how they’ll deliver water services in the future to the Government by 3 September 2025, so we’re working backwards from there.”

The region’s mayors are collectively urging people to ‘stay informed’ and be ready to have their say when consultation on proposed options takes place early next year.

5 November 2024

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