Councils are dealing with increased regulatory rules and costs from government, higher environmental protection standards, soaring infrastructure and insurance costs and new investment needed to deal with growth and extreme weather.

It is very clear this work cannot be deferred anymore. Our country needs huge investment in waters infrastructure and successive governments have recognised this. In some places councils have reached the limit on how much they can borrow. Critical water infrastructure upgrades have been postponed to keep rates down.

Across New Zealand, all councils have been directed by government to consider how they can better, and more cost-effectively, provide waters services in the future.

How we do things now (aka status quo) isn’t an option under the Government’s new laws. Our current operating model would not meet Local Water Done Well requirements, including financial sustainability.

Many councils are already stretched thin trying to maintain ageing pipes, treatment plants, and pumping stations designed for smaller populations and lower standards than we need today to comply with new regulations.

Some are facing a perfect storm of:

• Pipes badly in need of repair, some that are leaking up to 49% of water before reaching homes
• Treatment systems that struggle to meet Taumata Arowai regulatory standards
• Growing populations putting more strain on existing systems
• Climate change bringing more extreme weather events
• Rising environmental standards that ageing systems weren’t designed to meet

Councils have been trying to “work smarter” for years, but there’s a limit to how much you can optimise systems that fundamentally need replacement.

As for “just cutting costs” - that approach is what got many councils into trouble in the first place. Years of keeping rates artificially low by deferring maintenance and new investment have created a massive infrastructure backlog that’s only getting more expensive the longer councils wait to address it.

What seems like saving money now often leads to much more significant emergency costs later - like when a main water pipe bursts and an entire area loses water, rather than being replaced before it fails.

• Taumata Arowai are creating a single wastewater discharge standard. This will potentially require higher standards of treatment for discharges to waterways. Taumata Arowai is the water services regulator for NZ. They have an oversight role in relation to the environmental performance of public drinking water, wastewater, and stormwater networks.
• The Waikato Regional Council will continue to regulate the taking of water and discharge of wastewater and stormwater (end of pipe) as per the proposed new standards.
• The Commerce Commission will oversee (and regulate) the investment in network and treatment plants - including requiring any action needed to improve performance. The cost of providing water services will also become regulated with a consumer protection regime and this will also be overseen by the Commerce Commission.

Our drinking water is regularly tested and is safe to drink. The changes to how we deliver our water services in the future is to ensure that continues.

The 2016 incident in Havelock North (where an estimated 5,500 people became ill with campylobacteriosis after drinking the town’s water supply) and the rising cost of maintaining water infrastructure has prompted the need for change.

The government has introduced Local Water Done Well (LWDW) - to achieve better health outcomes (that is, avoid another Havelock North-type situation) and environmental outcomes. This new approach requires councils to make big changes to how we deliver our water services. New rules and regulations mean we can’t keep things the same.

Much of New Zealand’s water and wastewater infrastructure was built after WWII and requires renewal. On top of this, changes in the regulatory environment mean these are not straight forward replacements - significant upgrades are needed.

We can’t guarantee that the modelling is right – financial models are always based on assumptions and the best current information. The Waikato Water Done Well model has been developed using best practice financial modelling, and reviewed by industry experts, based on financial information from Council’s 2024-34 Long Term Plan (LTP).

No matter which model we run, the CCO option keeps coming out as the best long term, or financially sustainable, option for Matamata-Piako.

When this work started, we had to use the LTP as a starting point to be able to fairly compare the options. We know some things have changed since then, and we expect the numbers will continue to change as more information becomes available. For example, the government is still finalising the rules and regulations that will guide cost estimates - and these may not be known until later this year.

The actual financial benefits of a CCO will be dependent on how many Councils choose to proceed – the current model is based on all seven Councils. However, it’s expected that working together will still create efficiencies in the long term, even if fewer councils are involved.

Council will receive an updated financial model before making a final decision.

No, not for the 2025/26 rating year. Residential ratepayers on low incomes may be eligible for a rates rebate of up to $790 a year under the Government’s Rate Rebate Scheme. 

If Council decides to form a CCO with other rural/provincial Waikato councils to deliver water services from 1 July 2026 (as proposed in the consultation), the rates rebates process will need to be reviewed in preparation for the change.

Stormwater is the water that runs off surfaces such as roads, driveways, footpaths and rooftops. It travels down gutters, into sumps and enters the stormwater network to be discharged into waterways. 

Stormwater is not the same as wastewater, which is anything that enters drains inside your home.

Council operates and maintains stormwater infrastructure across the district to limit the impact of flooding and to ensure that stormwater discharges to waterways are free from contaminants.

Our stormwater assets are linked to and maintained across various council activities such as roading, parks and reserves. Our stormwater system helps drain the water away.

For now, Council will continue to manage stormwater services. In the future, we might look at  whether the new water organisation could be contracted to take on this work.

As stormwater assets will continue to be owned by Council for the foreseeable future, the debt remains in our balance sheet. Rates will continue to be charged by Council for this service.

Council already has just over 1000 water meters installed on high-water-use properties in Matamata-Piako. These have been in place for some time and ensure high water users (such as swimming pool owners, or high-water use businesses) pay for the water they use. 

But the Government wants more transparency around the cost of water services. All councils (not just Matamata-Piako) will soon be required to show how much revenue is collected for waters services, separately to the other funding councils collect. That means all councils must separately charge for drinking water supply, wastewater and stormwater activities.  This is more difficult (and not as fair) without water meters. 

In the future, waters meters will also likely be a requirement of both the Commerce Commission (as the economic regulator) and the Waikato Regional Council which issues resource consent to take water from our water sources. In other parts of the Waikato region, the Waikato Regional Council has already required water meters to be installed, as a condition of granting a resource consent.  

Based on these factors, we expect residential water meters will need to be installed in Matamata-Piako in the future.  

If a CCO was formed, timing would be a decision for the CCO. 

If a CCO wasn’t formed, for the same reasons outlined above, Matamata-Piako District Council would still need to install residential water meters. 

To ensure we can meet government objectives, and to manage a precious resource more sustainably, it is likely to be within the next five years.

Around New Zealand, councils that already have water meters installed see far more efficient use of water. Often water use can drop as much as 20-25%.

Using less water is cheaper for households. But it also good for big water infrastructure assets. If less water is used, the hugely expensive assets we must all pay for (like water treatments plants) can do the job for longer. We don’t have to pay to replace them as quickly.

Water meters also help identify water leaks, including on private property. Fixing leaks means we use less water and that’s important. There is only a certain amount of water we can take from our water sources, and right now it’s not enough to service the projected growth in our district/service our growing district.

Overall, water meters are also fairer because you only pay for what you use. Those households and businesses that use less water, pay less.  Households and businesses that use more water, pay more.

Initially, households would not notice any difference. Quality drinking water will still come out of your taps, your toilets will flush and stormwater will be dealt with. 

No matter what option we choose, the costs to deliver these waters services are increasing, but forming a CCO would help lessen the increases, allow the costs to be spread more fairly over a longer period, and ensure costs are shared by future generations who will also use the infrastructure.

If a CCO is formed, from 1 July 2026 you will receive a separate bill for drinking water and wastewater. In time, this waters bill would come directly from the CCO, but initially Council would collect water charges on behalf of the CCO. All water and wastewater costs would be removed from your Council rates bill.

A CCO (Council-Controlled Organisation) is different to a council.

A CCO is governed by an independent board of directors, working to meet clear expectations set by shareholding councils and their elected representatives. Each year, CCOs must formally report back to their shareholding councils, to ensure those expectations are met.

For this CCO, it is proposed directors be appointed by a Shareholders Forum, made up of representatives from participating councils. Elected members, or Councillors, cannot be directors.

Directors would be appointed by the Shareholders Forum based on their professional skills and expertise. This would include financial, infrastructure, legal, tikanga Māori, environmental, engineering and strategic planning expertise. These skills are critical to making major decisions about costly, intergenerational infrastructure projects.

No, the CCO cannot be privatised. Under New Zealand law, it remains illegal to privatise council-delivered water services. This is to ensure they remain in public ownership.

The short answer is no. At the start, the CCO will continue to charge for water in the same way as councils – with money coming from our ratepayers being spent in our community. Councils have set a clear expectation that the CCO must target price increases lower than what councils could achieve on their own.

This means it is likely that there will be different prices across the region to reflect differences in investment, borrowings and costs of service. In the long-term, as the cost savings and efficiencies of working together are realised, the CCO may choose to use these savings to bring prices closer together. They can do this as and when it suits their customers, the CCO and its shareholding councils.

A perceived loss of control is considered the main trade-off. Some may worry about losing direct control over our water resources.

Local Water Done Well is changing the whole waters environment. The control we have now over our waters assets is not what it will be in the future, regardless of the option we go with. There will be regulators overseeing, approving and determining what we do.

Under a CCO, ratepayers can still influence Council as shareholders, take part in planning processes, and directly engage with the CCO. Consumers will also have protections through the Commerce Commission.

Getting to the stage of an established CCO with councils being able to commit to a shareholding agreement is expected to cost around $2million.  It will also take time and effort to actually transfer water services businesses from each council into the CCO.

As part of considering Waikato Water Done Well as an option, work is underway to develop a programme of work that will achieve a safe transfer from councils to the CCO. Once this is complete, we will know in detail what we need to do and when we need to do it.  The intention is that this will be financed by the councils in the short-term, but the CCO will then reimburse the councils for this cost once it is operational.

There would also be set-up costs for an internal business unit and these would be fully funded by Council.

We are proposing to create a new water organisation jointly-owned with up to six other district councils in the Waikato.

The financial benefits of a CCO will be dependent on how many Councils choose to

proceed – the current model is based on all seven Councils. However, it’s expected that working together will still create efficiencies in the long term, even if fewer councils are involved. Council will receive an updated financial model before making a final decision.

All Waikato councils engaged in discussions about future water services delivery models have expressed a long-term preference for one water services CCO to serve the whole of the Waikato in the medium to long term (possibly within five to 10 years).

If a council decides not to be part of the proposed Waikato Water Done Well or Hamilton-Waikato District CCOs this year, the door remains open for them to join at a later date.

No. You will be billed for water and wastewater (sewerage) by either Council or the Waikato CCO.

If we transition to the Waikato CCO the bill may continue to come from Council until a full transition is completed.

The amount you pay is determined by the Council or CCO based on the cost to provide that service i.e. drinking water supply or wastewater treatment

In time, yes.

However, at the beginning, when the CCO is first established, councils may send out the bills on behalf of the CCO. These details are still being worked out.

Whether the bill is from councils on behalf of the CCO or from the CCO, there will be clarity on how much you are paying for water services.

If a council decides to continue to deliver water services in house - then the council will also set out how much they are charging for water compared to other council activities.

If a new CCO is established then they will be the provider of water and wastewater services across the area of the participating councils. Individual households/businesses will become customers of the CCO - with each council remaining a shareholder in the new organisation.

All revenue collected by the CCO must be spent on water services. The CCO does not issue “dividends” the way a private company does.

Any operating profits will be reinvested in capital projects or used to reduce future customer charges. That would be determined by the board of directors.

Yes – as part of the new model, Council will need to provide financial backing for the water services organisation’s borrowing. This could be done by guaranteeing the loans or by setting up an “uncalled capital facility” – a form of financial support that would only be accessed if the organisation defaulted.

It’s important to note that a default is considered very unlikely, but this type of backing helps the CCO borrow at better rates, keeping costs down for everyone.

There will be water restrictions during periods of very high demand. There is enough water for everyone but it is not affordable or realistic to invest in infrastructure solely to address major peak demands.

Local Water Done Well is changing the whole waters environment. The control we have now over our waters assets is not what it will be in the future. There will be regulators overseeing, approving and determining what we do.

It is unlikely that we would have the same level of control we have now over our water resources under an internal business unit.

Borrowing is one of the few tools councils can use to fund large-scale infrastructure projects, such as upgrading water pipes and treatment plants. Like a mortgage, it spreads the cost across the generations that will benefit from the investment.

There are strict rules around how much councils can borrow, and different rules apply depending on whether councils manage their own water services or join a new water services organisation (Council-Controlled Organisation, or CCO).

Currently, Matamata-Piako District Council can borrow up to 1.75 times its annual revenue (a 175% debt-to-revenue ratio). If the Council were to obtain a credit rating, this could increase to 2.5 times its revenue (a 250% ratio).

In contrast, new multi-council water organisations would be able to borrow up to five times their annual revenue (a 500% ratio), specifically for water and wastewater infrastructure. This provides greater financial flexibility to invest in the large-scale upgrades needed across the region.

The Local Government Funding Agency (LGFA) is a key part of how councils and the proposed new water organisations access affordable borrowing. It lends to councils and Council-Controlled Organisations (CCOs) at lower interest rates than commercial banks, because it pools local government credit risk and has a high credit rating. Any water services CCO would need to meet LGFA requirements and maintain a strong financial position to access this funding.