skip to main content

FAQ'sPātaitai putuputu

Read our frequently asked questions about the Three Waters Review

Frequently Asked Questions

Showing search results for ""

Current filter:

Hawke's Bay Review

The report demonstrates that a regional asset owning CCO is the service delivery model that best meets the Review’s investment objectives and principles:

  • It is the option that best addresses the issue of affordability, and the very real risk that the scale of investment required to meet new standards and community expectations is greater than forecast
  • A dedicated regional asset owning CCO is able to concentrate on three water challenges and prioritise investment decisions across the region, leading to better environmental and community outcomes than councils can individually achieve
  • It would have sufficient scale to create strategic capacity and capability across the region and support the areas where that is currently lacking. Scale, strategic capacity and capability give levels of expertise and resilience in three waters that can be applied regionally, benefitting all ratepayers across the region rather than only some, as is the case now
  • The model delivers the best opportunity to provide a meaningful role for Māori, including co-design and co-governance
  • A regional water CCO is able to provide improved asset management, improved management of risk, and is better placed to meet any increased compliance requirements or future increases in environmental standards than the Councils can individually
  • As well as being the only model that effectively addresses affordability issues across the region, the asset owning model also maximises available operational savings for the region, ensuring that services are not only affordable, but delivered in a cost-effective way
  • There would be a need to ensure that the Statement of Intent and Shareholders Agreement of a regional CCO retain an appropriate balance between the individual priorities of each council with regional priorities, including planning and supporting growth.

Further information about the recommended preferred option can be found on pages 16 – 19 of the executive summary in the report. 

To watch Hawke’s Bay Three Waters Review Report summary videos.

It was not up to councils to express a view at this point. Our councils have now opted to participate in the first phase of the Government reform programme to review and co-design potential service delivery models.  

Government has indicated a preference for a multi-regional service delivery model broadly structured along the same lines as the reports recommended preferred option. The Morrison Low report sets out the benefits and challenges of such a model, so we are very well informed for discussions with Government.

With the work that we have done, Hawke’s Bay is ahead of any other region of New Zealand. Councils now enter the Government reform process knowing that affordability over the long term and enhanced service delivery are all possible by working together, but we also need Governments support to help resolve the challenges posed by regionalisation.

Initially a longlist of options was considered, and this was reduced to a shortlist through a high-level assessment. The shortlist represented the options most likely to meet councils’ investment objectives and included:

  • Enhanced status quo
  • Shared service business unit
  • Hawke's Bay management CCO
  • Sub-national management CCO
  • Hawke's Bay owning CCO

You can find out more information about the options and the detailed evaluation of each against the investment objectives can be found on pages 9 – 15 of the executive summary and in the economic case from page 59 of the report.  You can also watch the Hawke’s Bay Three Waters Review Report summary videos here.

Creation of a Hawke’s Bay regional water CCO will impact the resourcing, organisational structures and functions of each council.  Water activity is a significant proportion of each council’s budget, so the transfer of water activity to a CCO will impact the way each council operates in the future.

If a move to an asset owning CCO did proceed, it is envisaged that the vast majority of three waters staff would transfer to the new organisation on conditions no less favourable then they are already employed upon.  As a region it is very likely we will need further people with the skills and capabilities to meet the new regulations and standards being imposed by Government reform. The creation of a regional CCO on council structures extends further than just the staff whose roles are solely related to water.  Many functions within council spend a proportion of their time supporting three water related matters. For example: finance, human resources and communications.

Morrison Low also assessed the matter of stranded costs. In each council there are currently organisational costs which are spread across each council and the services that it delivers. The three waters services are a substantial part of each council’s operation, typically one third by value. The three waters services therefore bear a substantial part of the corporate overheads. There are some aspects of the corporate overhead cost that can be transferred to the regional water CCO however the vast majority of the remaining cost that make up the corporate overhead charge previously borne by the three waters services, are now “stranded”. 

Further information can be found in the commercial case (pages 102 – 122) and the financial case (pages 144 – 147) of the report.

We know that regionalising three waters service delivery comes with challenges, no matter what model is adopted. The Asset Owning Council Controlled Organisation is the option that best addresses the scale of investment required to meet new standards. 

However, it is important to understand the analysis in the report is based on current available data and what is currently known about potential likely new water services regulations and standards. 

Given Government is yet to announce the specifics of the new standards and regulations and given potential changes in asset valuations between now and the establishment of any regional or multi-region service delivery model, the modelling is likely to change. 

Acknowledging this is a significant issue the Hawke’s Bay councils will collectively be engaging with Government with a view to solving this issue  that comes from regionalisation. These challenges will be faced by every region in the country participating in the three waters reform process.

Further detail about regionalisation of costs is discussed in the financial case (pages 128 - 133) of the report. 

Participating in the first phase of the Government process brings with it access to $50m of stimulus funding that means we can progress important three waters related investment immediately. 

With the findings of the report, Hawke’s Bay councils can advocate for the best possible outcome for our communities through the Government process. In particular, the Review findings provide councils with the opportunity to engage with Government on solving the challenges that come from regionalisation of three waters services and the costs involved.

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 service delivery option that best meet the Hawke’s Bay objectives and principles and 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.

The Māori engagement process identified a cultural gap in the better business case framework for the Three Waters Review report. Initially the approach was to weave a cultural element through the business case but during the project it became clear that a separate cultural case was required. The rationale for a cultural case was that Māori cultural values and traditions associated with water have been well documented within council processes, however the operational implementation of cultural values was considered to be a gap.

The cultural case acknowledges the need to consider co-design with Māori  the governance and operational models with a goal to optimise cultural values across three waters service delivery.

The case highlights that within the regulatory framework relating to water, Te Ao Māori, through its language, genealogy, stories and traditions, requires a greater level of competency than usual. 

Underpinned by the Treaty of Waitangi, the cultural case identifies a model that paves the pathway of Hawke’s Bay partnership and co-design with Māori. In doing so it recognises twenty-plus years of relationship growth between five Hawkes Bay councils, post-Treaty settled iwi and the Ngāti Kahungunu iwi Taiwhenua structure. The cultural case recognises iwi and hapū regional affiliations and their preparedness to act collectively which exists because of relationships, trust and confidence, born of time and kanohi ki te kanohi. This does not exist under a multi-regional approach. 

Further detail about the cultural case is discussed on pages 53 – 58 of the report. 

The Review process began back in late 2018, funded from Hawke’s Bay’s five councils. Recognising how important the Review is, and the proactive leadership we have taken, Government also agreed to provide funding support for the Review. 

The total cost to the Hawke’s Bay councils to date has been $200,000. We have also received $815,000 from Government delivered in tranche payments against key milestones delivered for the Review.

The independent review only assesses and provides independent recommendations on:

  • The effectiveness of existing drinking, waste and storm water service
  • Alternative service delivery options.

This review was not about:

  • Freshwater reforms
  • Privatising assets or services
  • Water storage or issues such as chlorination. 

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 any new drinking water regulations. 

However, a key consideration for the Hawke’s Bay Three Waters Review was that any model proposed (and its operating framework) would be able to deliver different service levels depending on community requirements. 

Community consultation

On our communities’ behalf, councils will be making the most of the information we have from our own Review to advocate for the best possible outcome that meets the needs of our rural and urban communities. 

We understand from the timeline Government has put forward that there will be the opportunity to engage with stakeholders and Māori, however the details of that process – how it will work, who will be consulted with – are not clear yet and we await confirmation from Government.

That is for Government to answer. However, we are determined to do all we can to ensure that the cultural case that has been such an important consideration in our Review is not lost and we will be seeking those assurances from Government. 

The cultural case developed in our Review identifies a model that paves the pathway of Hawke’s Bay partnership and co-design with Māori underpinned by the Treaty of Waitangi. In doing so it recognises twenty-plus years of relationship growth between five Hawkes Bay councils, post-Treaty settled iwi and the Ngāti Kahungunu iwi Taiwhenua structure. The cultural case recognises iwi and hapū regional affiliations and their preparedness to act collectively which exists because of relationships, trust and confidence, born of time and kanohi ki te kanohi. This does not exist under a multi-regional approach. 

We understand from the timeline Government has put forward that there will be the opportunity to engage with stakeholders and Māori, however the details of that process – how it will work, who will be consulted with – are not clear yet and we await confirmation from Government.

Government reform process

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 threewaters (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.

Hawke’s Bay will use the findings from our own Review to partner in the service delivery arrangements reform process.

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.

Click for more information on the Government reform process.

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

  1. Supports the Government’s reform objectives (see page 6 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.

The indicative time line for the Government process is as follows:

Three Water Reform Process

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.

Hawke's Bay councils have decided to participate in the Government’s three waters service delivery reform process. This 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.

Our Review mainly focused on Hawke’s Bay region, but we did review the option of a sub-national management council controlled organisation (CCO). Morrison Low assessed and recommended a asset owning council controlled organisation for Hawke’s Bay because in their view it best meets the region’ objectives and principles determined at the beginning or our project.

Furthermore, the cultural case developed in our Review identifies a model that paves the pathway of Hawke’s Bay partnership and co-design with Māori underpinned by the Treaty of Waitangi. In doing so it recognises twenty-plus years of relationship growth between five Hawkes Bay councils, post-Treaty settled iwi and the Ngāti Kahungunu iwi Taiwhenua structure. The cultural case recognises iwi and hapū regional affiliations and their preparedness to act collectively which exists because of relationships, trust and confidence, born of time and kanohi ki te kanohi. This does not exist under a multi-regional approach. 

Government has indicated a preference for service delivery models broadly structured along the same lines as Morrison Low’s recommended preferred option. This means with the analysis and data from the report, we are in a very strong position going into the conversations with Government because we understand the potential benefits and challenges of the model for Hawke’s Bay’s communities.

It goes without saying our priority is to advocate for the best possible outcome for our communities here in Hawke’s Bay.

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

Disclaimers and Copyright
While every endeavour has been taken by the Three Waters Hawke's Bay to ensure that the information on this website is accurate and up to date, Three Waters Hawke's Bay shall not be liable for any loss suffered through the use, directly or indirectly, of information on this website. Information contained has been assembled in good faith. Some of the information available in this site is from the New Zealand Public domain and supplied by relevant government agencies. Three Waters Hawke's Bay cannot accept any liability for its accuracy or content. Portions of the information and material on this site, including data, pages, documents, online graphics and images are protected by copyright, unless specifically notified to the contrary. Externally sourced information or material is copyright to the respective provider.

© Three Waters Hawke's Bay - www.hbwaters.nz / +64 6 000 0000 / comms@hb3waters.nz