How councils can steer clear of troubled waters

Comment: New Zealand’s water, wastewater and stormwater networks and services have been desperate for attention for many years, with aging pipes and treatment plants, a massive and growing infrastructure deficit, and varied delivery across the country.
In 2000, the Parliamentary Commissioner for the Environment concluded the existing model had reached the end of its design life, so this is even more so in 2024.
In our own almost 75 years’ combined experience in the water industry, we’ve seen a lot of change, a lot of well-intentioned approaches, and a lot of the same problems resurface.
Current and successive governments have sought to respond to challenges facing New Zealand’s water services infrastructure and delivery in different ways. The common goal has been to implement regulations and programmes to raise standards, address funding gaps, and more consistently manage how water services in Aotearoa are delivered.
The Labour government’s water reform programme has been repealed by the coalition Government, and replaced with Local Water Done Well. Earlier this month, the Government announced new models for local government ownership, operation, and funding of water networks and services.
Though our nation’s diversity of views should always be respected, and we must learn from the past as we look to the future, there comes a point where we need to move from conversation to clear action. Local Water Done Well presents such a moment.
Central government has laid the foundations and set the framework, and now it’s time for councils to act. Collaboration will be critical, as will taking a long-term view, to ensure safe, healthy and reliable water services now, and for future generations.
In this article we break down the detail, and outline the key things councils and ratepayers need to keep in mind: enduring affordability and prioritised investment, having the right people in place, compliance with economic and quality regulations, planning for growth, and ensuring resilience to climate and hazards.
Local Water Done Well sets out to ensure that drinking water, stormwater and wastewater services remain in local council ownership and control, which requires councils to invest in the maintenance and replacement of vital water infrastructure to meet quality standards.
The legislation to implement the policy is expected to be fully enacted by mid-2025.
Within the timeframe of the Local Government (Water Services Preliminary Arrangements) Bill being enacted, councils across Aotearoa must produce water services delivery plans that demonstrate how they will fund the long-term investment in delivery of water services, look after the assets and meet all regulatory standards.
These plans will be publicly notified and available on council or Department of Internal Affairs websites, providing a new level of public transparency. Through this, information will be more readily available for the public to see how safe their water supplies are now, and into the future.
New Zealand’s water infrastructure needs to be considered in inter-generational terms, with assets that can exist for up to 100 years. With such an over-the-horizon outlook, it is important to understand which investments must be prioritised and front-footed, and which investments can be safely deferred.
Yet to date, for reasons of affordability, changing needs and conflicting priorities, investment in our nation’s water infrastructure has all too often been kicked like the proverbial can down the road, with a bill for future ratepayers to eventually face. Local Water Done Well seeks to address that by bringing in greater accountability and regulatory oversight of those delivering water services across New Zealand.
Within this framework, opportunities arise for neighbouring communities to leverage economies of scale and enhance affordability, through shared services and greater collaborative efforts. Working together, of course, is something councils across the motu have considerable experience in.
We know that investment is needed to address our nation’s infrastructure deficit, and that Local Government will need to prioritise those water services assets and systems most needing attention, to ensure compliance with health, safety, and environmental regulations and requirements.
Beyond a primary emphasis on the safe delivery of water services, prioritisation should be given to the protection and maintenance of existing assets, meeting existing levels of service and for asset owners to protect and enhance what they’ve already got, and not just think about what new assets need to be built.
Under Local Water Done Well, there is going to be much more scrutiny of compliance and consents – to make sure the areas where we live, work, and play are safe. All of which will impact the prioritisation of investment.
To effectively deliver Local Water Done Well, councils must ensure they have appropriately qualified staff as well as the support of the wider water services sector, to retain and attract people with essential skills.
This includes disciplines such as technical asset management, financial modelling, and service delivery arrangements to meet legislative requirements and maintain local control over water services.
It’s likewise crucial for councils to have people and teams capable of producing water services delivery plans that show long-term financial sustainability and compliance with regulatory standards.
Under Local Water Done Well, councils will need to prepare for economic regulation, which is a fundamental aspect of the legislation, likely to come into effect in three years.
The purpose of this is to ensure consumers are charged prices that reflect the true cost of water services, that the delivery of services meet quality standards, and confirm that water service providers are making adequate investments in their infrastructure.
In preparation, councils will be asked to include in their plans baseline information about their current and future plans for water services, level of services, assets, operations, revenue, pricing, expenditure, projected capital expenditure, and necessary financing arrangements.
Focusing on consumer affordability, councils must consider ways to reduce the financial burden through more efficient procurement, optimised renewals, and smart decision-making. Opportunities for future cost reductions could include standardised equipment, artificial intelligence, and simple-format consents. The use of comprehensive programmes of work, in place of isolated projects, would help water services providers to deliver faster, more consistent and cost-effective solutions.
Beyond cost will be compliance with regulations to meet safety and environmental standards.
Taumata Arowai is the primary regulator for drinking water in Aotearoa, with an oversight role for wastewater and stormwater. Regional councils are the primary regulator for environmental standards for water services consents (water takes, wastewater and stormwater discharges).
Taumata Arowai are about to consult on the introduction of wastewater standards, which are intended to simplify the reconsenting of wastewater discharges, and are a critical element in getting a national, consistent, efficient and affordable approach to treatment of wastewater.
At the forefront of many local government decision-makers’ minds will be how to effectively plan for growth, and making our communities desirable places to live. Supporting councils with housing growth and urban development, as outlined in their long-term plans, is a requirement of the Local Water Done Well policy. 
Providing for growth can pose an expensive challenge, as the costs of supporting infrastructure need to be considered in a balanced way to ensure developers pay for their fair share, alongside the community.
A current lack of standardisation across Aotearoa also increases costs – for capital works and for spares and maintenance. It is encouraging to see the standardisation of water treatment plants and also the National Engineering Standards that are now being introduced as an important step forward to reduce compliance and design costs.
Water infrastructure consists of the various assets used to gather, store, convey, process, and manage water services.
This infrastructure is intricate, costly, and vulnerable, with approximately 80 percent of it below the ground. Such positioning makes water infrastructure especially at risk from rising sea levels, storm surge, and flooding.
Additionally, the cost and accessibility of insurance are increasingly strained because of climate-related weather events. Cyclone Gabrielle, for example, wreaked havoc on the water infrastructure in Gisborne and Central Hawkes Bay, resulting in significant service disruptions and costs to repair and reinstate.
Consequently, the difficulty and expense for councils across the country, to plan and prepare for climate-resilience, and to secure insurance for their water service assets, is likely to escalate.
Water knows no boundaries.
And so for the best outcomes, councils must continue to work together and collaborate, beyond borders and traditional ways of working.
To be ready for what’s to come, councils and communities need to focus on long-term affordability, with the right people and processes in place, to ensure our water services are ready to support the growth and wellbeing of our communities for generations to come.
The Government has said it is keen to localise water services delivery, and is establishing the settings to allow this to happen – it’s up to our local councils now to act, to improve our nation’s water services delivery.
With everything that councils need to deliver, this is no small ask, but safe, healthy, reliable and affordable water services are something our communities across Aotearoa need, and rightly deserve.