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Read our frequently asked questions about the Three Waters Review

Frequently Asked Questions

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After the Havelock North drinking water contamination incident in 2016 and the inquiry that followed into its cause, Government undertook a major review of the future state of New Zealand’s three waters system. This has resulted in a broad package of reforms to New Zealand’s three waters regulatory system.

There are three parts to the reforms:

1) A new regulatory authority
2) New standards and responsibilities for water suppliers
3) New three waters service delivery arrangements

Earlier this year the Taumata Arowai Water Services Regulator Bill, came into effect. This legislation will implement the decision to create a new regulatory authority to oversee, administer and enforce the drinking water regulatory system.

Government has also introduced the Water Services Bill, setting out the new responsibilities that will be imposed on drinking water suppliers and proposing new arrangements relating to sources of drinking water. Submissions on the bill are likely to be called in September.

These reforms will have significant implications for three waters service delivery and councils across the country will need to adapt their approaches to meet the new requirements

You can find out more about the Government’s Three Waters Review here.

In July 2020, the Government announced a funding package of $761 million to provide immediate post-COVID-19 stimulus to local authorities to maintain and improve three waters (drinking water, wastewater, stormwater) infrastructure, and to support reform of local government water services delivery arrangements.

Government has invited councils to opt in to a partnership process to reform three waters service delivery arrangements, and by doing so, allow councils to access the $761 million.

Hawke’s Bay will be allocated $50million, which is made up of an allocation for each local council based on population and land area; with a top up in recognition of the leadership and progress Hawke’s Bay’s councils have shown in proactively working together to investigate regional service delivery options. (FAQ Government Three Waters funding allocation)

The Government has asked us to suspend our Review programme work and to consider opting in to the Central Government three waters reform process, and we have until the end of August to decide.

Central Government’s view is that a partnership approach with local government will best support the wider community interests and ensure that any transition to new service delivery arrangements is well managed and as smooth as possible. With this in mind, a joint Three Waters Steering Committee has been formed to provide oversight and guidance on Three Waters services delivery and infrastructure reform.

Assuming that the councils decide to opt in to the Government ‘s partnership process, the indicative time line is as follows:

In July 2020, the Government announced a funding package of $761 million to provide immediate post-COVID-19 stimulus to local authorities to maintain and improve three waters (drinking water, wastewater, stormwater) infrastructure, and to support reform of local government water services delivery arrangements.

Government has invited councils to opt in to a partnership process to reform three waters service delivery arrangements, and by doing so, allow councils to access the $761 million.

Hawke’s Bay will be allocated $50million, which is made up of an allocation for each local council based on population and land area; with a top up in recognition of the leadership and progress Hawke’s Bay’s councils have shown in proactively working together to investigate regional service delivery options.

The allocation is as follows:

Wairoa District Council $11.04m
Hastings District Council $15.36m
Napier City Council $12.51m
Central Hawke’s Bay District Council $11.09m

The funding is subject to all Hawke’s Bay councils agreeing to participate in the Three Waters Services Reform programme, by signing a Memorandum of Understanding with the Crown and each council signing a Funding Agreement that sets out the terms and conditions attached to its funding and signing a Delivery Plan of the projects to be delivered.

Councils have until the end of August to decide.

Either for operating or capital expenditure on three waters service delivery, which:

1) Supports the Government’s reform objectives (see page 3 of the Guide to Stimulus Funding)
2) Supports economic recovery through job creation
3) Maintains, increases and/or accelerates investment in core water infrastructure delivery, renewals and maintenance.

Hawke’s Bay is best prepared for the Government’s service delivery reform process. Our councils are in a unique leadership position going into the Government’s three waters service delivery reform process.

Because we have voluntarily worked together to commission an independent in-depth assessment of the issues and options for the future of three waters service delivery across the region, we are in a very strong position to represent the interests of Hawke’s Bay’s communities in the co-design of any future service delivery models with Government.

Going into the Government reform process, we will have already done the work to identify the right solution to help resolve the following challenges Government is seeking to address:

• Being able to affordably deliver core three waters infrastructure and services
• Managing increased demand, as our communities and our economies grow
• Maintaining the condition and performance of our three waters services
• Ensuring we have the right capability and capacity
• Ensuring our three waters services are resilient
• Managing the environmental impacts of three waters services; and
• Meeting increasing government standards for risk and compliance.

This means Hawke’s Bay councils can, together, advocate for the very best outcome for our communities.

Government has made it clear it wants to see national reforms of service delivery arrangements so that councils can meet the new drinking and waste water standards ahead, and communities can afford the infrastructure improvements that are needed to bring three waters services up to standard for the long term.

Participating in the Government’s three waters service delivery reform process means we will be able to advocate for the recommendations from our review, which reflect the best possible outcome for Hawke’s Bay perspective and, at the same time we can access Government funding to help meet the substantial costs associated with the new regulations and standards that are needed here in Hawke’s Bay.

The Government has indicated that its reform programme will examine at a minimum:

  • Water service delivery entities that of significant scale, are asset owning, structured as statutory entities and are publically owned
  • Delivery of drinking water and waste water services are a priority – storm water where effective and efficient
  • Must have mechanisms for enabling iwi/Māori input
  • The potential size of entities will need to be considered against:
        o Potential to scale benefits at a multi regional level
        o Alignment of geographical boundaries to encompass natural communities of interest
        o Relationships with relevant regulatory boundaries, particularly to enable water to be managed from source to the sea

It is too early to say, however our independent review report means we are well informed going into the conversation with Government and we can present a strong case for what will work best for Hawke’s Bay. 

Government has made it very clear that water services remain publicly owned. 

There are a number of phases to the Government’s reform programme and councils have the ability to opt in or out at different stages. We will be seeking to understand from Government how they propose to consider each phase with regard to consultation with communities and Māori.

That is for Government to determine. However, our independent review report highlights the importance of a future service delivery model where Māori values and participation are critical at all levels – co-design, governance, engagement, and cultural performance indicators. We will be strongly advocating our Review’s cultural case to Government.

That is for the Government to determine. However, our independent review report identifies the potential for a model that paves a pathway of partnership and co-design underpinned by the Treaty of Waitangi. The independent Review report highlights the opportunity to build a model unique to Hawke’s Bay that reflects co-design with Māori of both governance and operational models with a common goal to optimise cultural values across the three waters service delivery. We will be strongly advocating our Review’s cultural case to Government. 

Drinking, waste and stormwater services are delivered by your local council. The ‘services’ include everything done to manage and maintain these three waters in our communities. The Review is looking at the effectiveness of the way we manage three water services at the moment, and identifying whether there can be a better approach for the whole region.

This project is all about future-proofing the way we manage drinking, waste and stormwater in Hawke’s Bay.

The Three Waters Review is a collaboration between the five councils in Hawke’s Bay; Wairoa, Napier, Hastings, Central Hawke’s Bay and Hawke’s Bay Regional Council. The council Chief Executives are sponsors of the project and it is led by a council regional programme manager. The councils have engaged the expertise of management consulting firm Morrison Low and their partner WSP to provide an independent Review of current water services and potential future service delivery options, and to recommend a preferred option.

The Review kicked off in February 2019, when all councils agreed to work together to explore service delivery options for three waters across the region. The first phase of the Review involved assessing our current services delivery arrangements and identifying the potential options or models for a region-wide approach. Government funding support enabled, the more detailed analysis of potential service delivery models. The report is now complete and is being presented to councils, together with their respective Māori standing committees during August. The Review report will be formally delivered to councils in September and then it will be made public.

At that point, Government has asked us to suspend our programme and to consider opting in to the Central Government reform process.

The Review was divided into four phases, each costed and funded separately. Initial costs have been borne by the five Hawke’s Bay councils, and Government who committed funding of $1.55m for the next phases, subject to councils’ and Government’s decisions to proceed at each stage. We have just completed Phase 2 of the Review - the delivery of the Three Waters Report.

For the work completed to the end of phase 2 of the programme councils have collectively spent around $200,000.

The project started in early 2019. The full report evaluating the options and providing recommendations on a preferred option will be delivered to councils in September.

At that point, Government has asked us to suspend our programme and to consider opting in to the Central Government reform process. 

Five possible options have been considered. The full independent report evaluating the options and recommending a preferred option will be delivered to councils in September. At that point, Government has asked us to suspend our programme of work and to consider opting in to the Central Government reform process.

OptionKey detail

Enhanced status quo

Councils would each retain responsibility for all aspects of service delivery and asset ownership, and three waters services staff would remain employed by the councils.

The approach would allow for additional resource and investment in infrastructure to meet changes to three waters regulations.

Regional Shared Services Business Unit

A Shared Services Business Unit (SSBU) would see staff from each council seconded into a single group but continue to be employed by their respective councils. Likewise, assets would continue to be owned by respective councils.

The public would deal directly with councils for three waters matters.

The SSBU would have regional strategic oversight of asset management and infrastructure delivery; and would plan and deliver all the capital and operational works for the region.
Accountability for overall performance would remain with councils and councils would maintain their role as the interface with the community.

Asset Management Council Controlled Organisation (CCO)

Council Controlled Organisations are accountable to councils, who determine the objectives for each of these organisations and monitor their performance. The councils are accountable to ratepayers and residents for the performance of the CCO.

Three waters assets would be owned by each respective council.

The CCO would employ its own staff and provide its own support services.

The public would deal directly with the CCO for three waters matters.

A Management CCO would have regional strategic responsibility for network management and asset management strategies and deliver all capital and operational works for the region.

Strategies and plans would be approved by councils and costs would be recovered from each council based on the funding model chosen.

The CCO would be overseen by a Board of Directors and would be accountable to a joint committee of the councils.

Asset Owning Council Controlled Organisation (CCO)

Council Controlled Organisations are accountable to councils, who determine the objectives for each of these organisations and monitor their performance. The councils are accountable to ratepayers and residents for the performance of the CCO.

A CCO would own the three waters assets and would be responsible for investment required for new infrastructure and meeting standards. It would consolidate operational and infrastructure costs to develop economies of scale.

The CCO would employ its own staff and provide its own support services.

An Asset Owning CCO would have regional strategic responsibility for network management and asset management strategies and deliver all capital and operational works for the region. Costs would be recovered directly from customers.

The public would deal directly with the CCO for three waters matters.

The CCO would be overseen by a Board of Directors and would be accountable to a joint committee of the councils.

Sub-National Management CCO

This option considers Hawke’s Bay joining an existing CCO or creating a model that goes beyond Hawke’s Bay.

The intention is that by widening the area covered by the model, there might be savings and efficiencies of scale, however there is no guarantee that the main office would be based in Hawke’s Bay.

The model would operate the same as for the Management Controlled CCO as set out above.

It should be noted that a condition of the government funding for the project is that the public must retain ownership of Hawke’s Bay’s drinking water, wastewater and stormwater (three waters) assets.

The full independent report evaluating the options and recommending a preferred option will be delivered to councils in September. At that point, Government has asked us to suspend our programme and to consider opting in to the Central Government reform process. 

The project team has been having ongoing kōrero with the Māori Standing Committees of the five councils, Hawke’s Bay Regional Council Regional Planning Committee and Māori Advisory Committee. We have been engaging with Te Taiwhenua o Tamatea Inc in place of a formal committee of Central Hawke’s Bay District Council.

Should the councils of Hawke’s Bay decide to opt in to the Government reform programme, Government requires councils to work with stakeholders and Iwi to consider multi-region groupings before the end of June 2021.

Our independent review report highlights the importance of a future service delivery model where Māori values and participation are critical at all levels – co-design, governance, engagement, and cultural performance indicators. We will be strongly advocating our Review’s cultural case to Government.

TAngata whenua

This third phase of the Hawke’s Bay Three Waters Review project is currently suspended as Government has asked us to consider opting in to the Central Government reform process.

There are a number of phases to the Government’s reform programme and councils have the ability to opt in or out at different stages. We will be seeking to understand from Government how they propose to consider each phase with regard to consultation with communities and Māori.

As a region it is very likely we will need boosted skills and capabilities for our three waters management to meet the new regulations and standards being imposed by government reform.

One of the key objectives of the Review is three waters service delivery that is affordable. The detailed report presented to councils in September will include cost projections. 

This project is about Hawke’s Bay’s drinking water, wastewater and stormwater (three waters) service delivery arrangements. It is not about other issues like freshwater management or chlorination.

Any decisions about chlorination or water quality will remain the responsibility of individual councils and will need to be considered in the context of the outcome of this Review and any new drinking water regulations. 

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