Local Water Done Well legislation is the Government’s plan to address New Zealand’s long-standing water infrastructure challenges.

It recognises the importance of local decision-making by aiming to ensure water assets stay under council ownership, directly or indirectly, and to let each council decide the best way to provide water services to its communities.

Irrespective of the delivery model we choose, Local Water Done Well legislation says we must:

• Meet new financial requirements, ensuringwater services are financially sustainableand ring-fenced (i.e. water services assets,revenue, expenses and debt are separate fromthe rest of council finances).
• Invest in infrastructure to address long-standing issues and support growth.
• Meet all regulatory standards for drinking water, wastewater and stormwater.
• Set fair prices that reflect the cost of delivering water services.
• Develop a fit-for-purpose Water Services Delivery Plan by early September, outlining how we will meet these requirements.

Read more about the Local Water Done Well legislation on the Department of Internal Affairs.

The Government requires that any assets, revenue, expenses and debt associated with water services be kept separate or ‘ring-fenced’ from wider Council services, irrespective of the service delivery model.

Legislation has clear rules for borrowing money depending on whether councils keep their water services in-house or form a Council-Controlled Organisation (CCO) to deliver water services.

Collectively, SWDW councils have been talking with Ngāi Tahu about the role of iwi within a new water services organisation. There’s been no decisions on what that role would look like to date. However, it has been agreed the role should be meaningful but not reach as far as the previous reform.

Click here to read an extract from our Consultation Document.

Given the magnitude and complexity of the proposed changes, the content provided in this consultation is indicative. It may change as we work through further implications of finalised legislation, compliance requirements, investment priorities, community affordability, and the CCO composition.

We have been conservative when quantifying the efficiencies likely to be gained by a jointly owned CCO. A review of our modelling suggests that efficiencies may be considerably higher.

We have had to make a range of assumptions to model potential costs. These include projects after 2035, inflation, interest rates, the size of the organisation, revenue, etc. Because of those assumptions, it’s important to note that the costs we refer to are very high-level.

New delivery models for water services

Local Water Done Well gives flexibility to choose a water services delivery model that will best serve the needs of communities, provided it is financially sustainable and meets the new economic, environmental and quality standards.

The legislation also introduces new requirements for managing water services, including:

Minimum requirements

• Local government water services providers must now comply with new legal requirements, such as governance and regulatory reporting.

Drinking water regulation

• Changes are being introduced to improve the efficiency and effectiveness of drinking water management. This includes updates to how the water services authority, Taumata Arowai, oversees and regulates the system.

Economic regulation

• The Commerce Commission will oversee local government water services, making sure consumers are protected and keeping an independent check on affordability.

Wastewater standards

• New national standards and engineering design requirements are being implemented to improve wastewater management, ensure proper systemdesign, and enhanced environmental protection.

Urban stormwater regulation

• Urban stormwater management is being improved with updated approaches to handling overland flow paths and watercourses in urban areas.

Water Services Delivery Plan

• Local Water Done Well emphasises community-driven decision-making and flexibility. The planmust show how the council will comply with all legal and regulatory requirements in the delivery of water services in its district.

The Government is creating a new oversight system led by the Commerce Commission to add an extra layer of accountability. Think of this as a watchdog that closely monitors how water services are run and how money is spent. It would have several essential tools to ensure everything is fair and efficient.

The Commerce Commission would do this by requiring water services providers (i.e. councils and water organisations) to be completely transparent about their finances and operations.

Water services providers will need to disclose detailed information about how they’re:

• spending money
• investing in infrastructure
• setting prices

This approach is designed to protect consumers and ensure the funds collected through rates and water charges are used responsibly.

The goal is to give everyone - from residents to elected members - confidence that water infrastructure is being managed professionally, efficiently, and with the community’s best interests at heart.

Before preparing a Water Services Delivery Plan, we need to decide on the best water services delivery model for our District.

We know that prudent and efficient investment and affordability are key concerns for our communities.

However, the new rules and regulations under Local Water Done Well legislation will increase the costs of water services delivery in the future, no matter which model we choose.

Over the past year, we have looked at available options, both individually and with our neighbouring Southland and Otago councils.

We’ve been supported by Morrison Low, a company with vast water reform knowledge and experience under both the previous and current governments.

Rural Water Schemes (the fourth water)

Rural water schemes play a vital role in provincial communities. While they operate differently from urban water systems, they’re just as important. They are the lifeblood of many rural communities and underpin much of our agricultural productivity.

In fact, rural water is so essential some would argue it deserves to be recognised as the fourth water service – right alongside drinking water, wastewater, and stormwater.

The Clutha District Council has been working closely with its nine scheme committees to understand their aspirations and what they see as barriers to success under Local Water Done Well.

Local knowledge is key to effectively managing rural water schemes. Ensuring this is retained within whatever service delivery model is chosen will be among the decisions we’ll have to make in partnership with rural water scheme users.

The current rural schemes are Moa Flat, Glenkenich, Waipahi (stock water only), Clydevale/Pomahaka, Richardson North and South, South Bruce, Wangaloa, North Bruce and Balmoral/Tuapeka.

The Balmoral/Tuapeka Rural Water Scheme is a new scheme which combined the Balmoral 1 and 2, Tuapeka West and East schemes and provides a new supply for Waitahuna and Lawrence. The new scheme will be serviced by new bores coming from near the Clutha River when it is commissioned later this year. Apart from Lawrence, these schemes have been on a long-term boil water notice due to non-compliant water and will remain on notice until the new scheme is fully commissioned and operational.

We have also had numerous aluminium advisories issued for our rural water schemes and while the risk to consumers from these exceedances is considered low, under the current regulations we are required to report and communicate this to consumers affected and to the regulator.

Here are some of the reasons why supplying water to rural communities is quite different from urban water supply:

• The level of treatment can vary depending where the water is sourced from throughout the Clutha District.
• Most of the water is used for things other than drinking.
• All rural schemes use low-pressure, trickle-feed systems rather than on-demand supply.
• The networks cover large areas but serve fewer people per kilometre of pipe.
• A small number of users consume large amounts of water.
• Charging is often based on entitlement units rather than fixed or metered pricing.
• Management is often more hands-on, with local committees overseeing the system.