Opinion: Nine lessons from the establishment of a new water entity

By Jaron Shaw, establishment programme director for Waikato Waters.

Creating one of New Zealand's newest water organisations has provided valuable insights for local government leaders navigating water reform.

On 1 July 2026, Waikato Waters assumed responsibility for delivering water and wastewater services on behalf of the South Waikato, Waitomo and Waipā district councils. Matamata-Piako will join the organisation on 1 October 2026, followed by Hauraki and Ōtorohanga in July 2027.

While every water services transition is unique, the experience of establishing Waikato Waters highlights several lessons that may be relevant for councils and future water service organisations across New Zealand.

Alignment doesn't happen by accident

At first glance, the Waikato grouping appears ideally positioned for a smooth transition. The councils are geographically connected, of similar scale, and face many of the same challenges and opportunities.

But alignment doesn’t simply exist – it must be deliberately created and actively maintained.

Long before formal establishment activities began, our councils invested significant time exploring options, understanding the potential benefits of a regional approach and building confidence in a shared future. That early phase rarely receives attention once programmes are underway, yet it often proves the most important.

Once a commitment has been made, maintaining alignment becomes an ongoing task. Each council continues to have its own priorities, planning cycles, financial pressures and community expectations. Keeping a regional perspective requires discipline, communication and governance. Waikato Waters held fortnightly meetings with all six council chief executives, fortnightly meetings with council transition leads, and quarterly meetings with our Shareholder Representative Forum. This cadence ensured issues were surfaced early and resolved quickly.

The blueprint already exists

One advantage for organisations embarking on water reform today is that much of the establishment architecture is already developed. Guidance from central government, combined with the experience of early adopters, means governance models, workstream structures and transfer processes are increasingly mature.

The Ministry for Cities, Environment, Regions and Transport has produced useful guidance, and new water entities are generally willing to share their experiences. No one is competing – everyone benefits from smoother transitions across the sector.

Design for the organisation you want to become

A key principle for Waikato Waters was designing for the long‑term operating model, not just Day One. This shaped decisions about enterprise systems, business processes and organisational design. Rather than implementing temporary arrangements that would later require replacement – at significant cost and disruption – we focused on establishing foundations capable of supporting future growth.

Our asset management system is a good example. We could have selected one council’s existing register and migrated the others. Instead, we invested in a modern, integrated system that will allow us to standardise asset data, improve lifecycle planning and reduce manual processes. Over time, this will enable more accurate renewals forecasting, better capital planning and more efficient maintenance scheduling.

Not everything needs to move on Day One

One of the most effective strategies was phasing the transition. Instead of transferring all six councils at once, we began with three in July, followed by a fourth in October and the final two in 2027. This spreads the workload and reduces pressure on staff, systems and governance.

We also made the call not to transfer every function to the new organisation at the same time. Essential corporate systems such as finance, payroll and compliance functions were prioritised for Day One. Billing and most customer interactions, however, remain with councils for the first year under formal service level agreements.

This gives us time to design and implement our own billing system. Having inherited six pricing regimes and six different billing cycles, it is complex. The additional time ensures we get it right.

Get the right people and get them early

Two areas consistently proved critical: financial independence and workforce transition. Having experienced leaders in finance and people and capability on board from the outset is essential.

Early financial capability enables a new organisation to establish funding arrangements, financial controls and long-term investment planning. Workforce transition is equally important. Investing time in early engagement with councils, developing the organisational structure, and establishing clear staff transition processes reduces programme risk.

Experienced employment relations and change specialists are invaluable. At Waikato Waters, every staff member transitioning from one of our councils was assigned a change partner to support them through the process.

After transition, we soon realised we needed to bolster training. Many staff were familiarising themselves with new devices and systems, some having used paper‑based processes until that point. On‑site training sessions were crucial in the first few weeks.

Measure readiness by capability, not milestones

A simple question guided our readiness assessments: Can the organisation perform its essential functions safely, legally and effectively from Day One?

Rather than viewing readiness as the completion of 150‑plus deliverables, we tested how those deliverables combined to create end‑to‑end capability – for example, the ability to pay staff accurately or manage health and safety effectively.

For boards and executives, a capability‑based approach provides a clearer picture of readiness and risk.

Seek clarity on what you’re inheriting

A newly-established water organisation inherits responsibility for a significant portfolio of assets, regulatory obligations and operational risks. Independent risk assessments gave our Board a clear picture of compliance, asset condition and health and safety risks. This builds confidence that decisions are based on the best available information and helps identify gaps early enough to address them.

Expect data quality challenges

If there is one lesson shared across almost every workstream, it is to assume data will require more attention than expected.

Asset information, customer records, contracts and operational datasets often need verification and remediation before they can be confidently transferred to new systems.

Start earlier than you think you need to, and accept that data gaps and quality issues will need ongoing attention beyond transition.

Plan for life after establishment

Perhaps the strongest reflection from the Waikato Waters experience is that establishment planning does not end at transfer. The formal transfer date is an important milestone, but it is only the beginning of the organisation's operational journey. Procurement, council onboarding, system implementation and project delivery continue well beyond Day One.

Future programmes may benefit from treating the first 12 months of operation as part of establishment itself, rather than a separate phase.

For water reform across New Zealand, that may be one of the most important lessons: creating a new organisation is not the finish line. It is the foundation on which long-term success depends.