Waikato Water Done Well (WWDW) is overseeing the largest and most complex waters CCO establishment project in New Zealand – bringing together the water services of six councils with the capacity to provide stormwater services and shared services to councils.

The new entity will have $155 million in revenue and $1.6 billion in assets.

1. Budget: the budget to establish Waikato Waters Ltd is capped at $16.5 million, as approved by the Shareholders' Agreement. This amount is less than 1% of the combined 10-year capital expenditure in the councils' long-term plans and equates to about $115 per connected property, spread over 30 years.
2. Investment costs: the establishment costs cover various essential investments, including transitioning around 80 water staff from the councils to the new entity, setting up legal structures, establishing governance support, and creating standalone financial borrowing and management capacity. Additionally, the new entity needs systems suitable for running a water utility business, including finance, HR/payroll, asset management, data management, record keeping, and corporate IT
3. Funding source: the shareholding councils are each contributing a portion of the initial establishment costs. The new entity will repay all of this money to the councils through its financing agreement with the Local Government Funding Agency.
4. Efficiency gains: the establishment costs are offset against the efficiencies gained over the first 10 years of operations, resulting in significant savings in the medium term. These efficiencies add up to a cumulative total of $500 million over the next 20 years

What will Waikato Waters cost to set up?

The budget to establish Waikato Waters Ltd is being worked through and will be approved by the SRF in July 2025.

However, the Shareholders’ Agreement confirms that the budget approved by the SRF in July 2025 can be no more than $16.5 million. This ceiling is based on establishment planning work under discussion by the WWDW participating councils.

What does this money get used for?

The investment costs for establishing the new waters entity include:

• transitioning around 80 waters staff from the councils to the new CCO and recruiting for any new roles/vacancies that are needed
• getting the legal structure in place so that each council, and their communities, are clear on the responsibility of the CCO to effectively deliver water services while remaining accountable to councils as owners of the CCO
• an independent Board being recruited with appropriate governance support in place
• establishing the standalone financial borrowing and management capacity for the CCO (including the steps required to gain approval from LGFA to borrow)
• setting up and preparing to take over all council water and wastewater capital projects
• initiating the first Statement of Expectation (a formal statement outlining the strategic priorities and what the council shareholders expect the CCO to deliver).

In addition the new CCO will need systems suitable for a standalone CCO running a water utility business such as:

• inance, HR/payroll, asset management, data management, record keeping and corporate IT
• licencing for software
• a centralised office with desks/chairs, computers and meeting spaces
• continuing to support local operational depots.

Where does the money come from for the establishment costs?

The shareholding councils are providing bridging finance to the CCO with each contributing to a portion of the initial establishment costs.

The CCO will repay all of this money to councils through the CCO’s financing arrangements through the Local Government Funding Agency (including any interest costs that may have been incurred by councils).

Will the establishment costs be added to my council rates?

The establishment costs (once the budget is confirmed by the SRF in July 2025 and being no more than $16.5 million) will be captured within the overall borrowings for the CCO’s water and wastewater service delivery.

Establishment costs are offset against the efficiencies gained over the first 10 years of the CCO operations so there is savings in the medium term. These efficiencies add up to a cumulative total of $500 million over the next 20 years.

How many staff will be needed on the Establishment Team?

It is too early to know definitively but the following provides an estimate of staff numbers needed to July 2026 (including workstream leads).

Governance and legal - 3-4
Funding and finance - 8-10
Operations and asset management – 5-6
Project management – 9-11
Systems and technology - 13-15
People and capability - 7-8
Communication and iwi - 2-3

Where possible these are expected to be made up of council secondments and contracted resources (generally for less than a one year). The balance will be specialist consultancy support (eg independent legal advice, web developer) where specific capabilities are required for a short period.

How do WWDW establishment costs compare to previous proposals?

A single large entity proposed under the previous reforms would have been handed $120 million of establishment costs to fund as debt from Day 1. 

To date, WWDW has spent $2 million and the councils involved have achieved:

• a signed Heads of Agreement
• community consultation on a proposed entity
• agreed in principle foundation documents
• an approved establishment plan

By comparison, none of this was achieved for the investment made in the proposed Waikato entity under the last reform.

What will the directors be paid?

At this stage, directors fees for the Establishment Board are estimated at between $150k and $200k (in total). After the establishment phase, fees are yet to be determined.

Is WWL there to make a profit?

No. WWL must, by legislation, reinvest all revenue into improvements to water services operations and delivery for its shareholding councils/communities. The constitution before councils for approval confirms that WWL will not be dividend paying.

Why does WWL need new systems to be set up?

Bringing together the different data sets of six or seven councils (including assets valued at $1.6 billion) under one umbrella is core business for WWL.

Looking at these costs over the time and the functions that they’ll be supporting such as operations (in the next 20-40 years) there is an upfront cost to getting things ready as evidenced in the projected efficiency gains for WWL.

WWDW financial modelling has identified $500 million cumulative savings over the next 20 years.

For example, instead of everyone opening up six or seven different files for each area every time more investment needs to be decided on, this data and information is available through connected portals – enabling all decisions to be made from a consistent baseline and in a cohesive way.

“Investment in solid processes and platforms is needed at the outset to make long term changes. Getting all of that into a solid foundation will set up Waikato Waters Ltd for the future, over decades. As anyone in business knows, getting the foundations right is critically important to future success, as it gives you the platform to get ahead and build something better without it falling down around your ears too quickly.  You wouldn’t skimp on the concrete mix when pouring the foundation of a new high-rise. Early investment in core business infrastructure is the concrete that supports your future growth and an ability to deliver better outcomes over a long period of time – just like you want a big building to stand tall for decades – it can only do that if it has solid foundations.”

Brad Olsen Chief Executive and independent economist – Infometrics

What is a CCO?

CCO is short for council controlled organisation. A council controlled organisation is an organisation that is owned by a council but operates at arm’s length from the council. A CCO has a Board of Directors who focus on achieving what their council owners expect of them. What their council owners expect of them is agreed via a Statement of Expectations.

What is Waikato Waters Ltd (WWL)?

WWL will be a joint CCO delivering water and waste water services on behalf of each of the shareholding councils.

WWL will manage the water and wastewater service delivery (including assets and liabilities) of its shareholding council owners.

WWL has independent, qualified directors who are appointed by the shareholding councils.

At this time, assuming the councils’ preferred options are formally adopted, WWL will be established in July 2025 and operational from July 2026.

Details of WWL are outlined in the Shareholders’ Agreement

What does the Board of Directors do?

The Board of Directors ensure the CCO achieves its strategy and objectives and meets all statutory responsibilities.  They do this on behalf of the CCO’s shareholders (the councils).  

The Board is made up of directors who focus on making the CCO “successful” - success being defined in the Statement of Expectations.

Directors will be people who are experienced in governance/leadership in commercial, strategic and business activities and they cannot be current elected members or staff of councils.

If the directors run the CCO, what is the role of the councils?

Elected councils ensure community interests are represented in the Statement of Expectations (and through them the CCO remains locally accountable).

For Waikato Waters Ltd, they would achieve this through the Shareholders’ Representative Forum [see next section].

What is the WWL Shareholders’ Agreement?

This is contract between the participating councils with each other and WWL setting out councils’ respective rights and responsibilities, and how they will collectively hold the proposed company to account in delivering water services across their communities.

The Shareholders’ Agreement is going to each Council for approval in the next five weeks. Once it is approved by all, we will post it in full on the website. Each of the participating councils need to approve and sign this before the CCO will be established.

What is the Shareholders’ Representative Forum?

The Shareholders’ Representative Forum (SRF) consists of a representative from each shareholding council. This is assumed to be the Mayor (or their delegate) of each of the councils where they discuss and coordinate decision making on relevant issues.

The SRF recruits the Board, prepares and approves the Statement of Expectations and provides direction and monitors performance of WWL.

What is the Statement of Expectations?

The Statement of Expectations outlines what WWL is expected to do and deliver. It is a high level document providing direction, not detail.

The Statement of Expectations is issued by the Shareholders’ Representative Forum setting out the strategic priorities and direction for the company.

How is the Board of WWL being appointed?

The Board of WWL will be appointed by the shareholding councils.

An independent recruitment company specialising in director appointments will assist in this process.

Nominations will be called for suitably qualified people who have the collective skill set agreed to by councils.

Those who are shortlisted will be interviewed by a sub-set of the Mayoral Governance Group with final decisions made by the Shareholders’ Reference Forum.

The Establishment Board (Chair and at least two directors) is expected to be in place by the end of August 2025.

Who appoints the Chief Executive?

The Establishment Board of WWL will appoint the Chief Executive.

Who owns the assets of the WWL?

WWL will own all assets that are transferred to it by the councils under agreements referred to as ‘transfer agreements’.

Although the ownership of the assets will transfer to WWL, the beneficiaries will continue to be the people of the districts now and into the future.

What will be the Council transfer dates for the CCO?

What is the status of Taupō District Council?

Taupō DC has identified a stand-alone business unit as its preferred water services delivery model and is currently consulting on this option.

However, as a founding council in WWDW, it wishes to remain involved in the Company as what is termed a Stage 1 Shareholder on terms set out in the Shareholders’ Agreement (which largely align with the Heads of Agreement that was entered into by the WWDW councils in December 2024).

How do the water services shift from the council to WWL?

Each council completes a transfer agreement. This documents what is transferring from that council to the CCO. These need to be completed to meet the timeframes above.

Can other councils join WWL?

Yes they can but not until after 1 December 2027 and only after agreement of the Board and SRF.

This is because the founding shareholders need this time to safely transition their water services businesses to the CCO and focus on developing the systems and processes required to achieve the anticipated efficiencies.

How will WWL work with Iwi?

Waikato Waters Ltd must meet all relevant Treaty settlement obligations and other agreements in place. This does not change any existing commitments to Iwi from any council.

The WWDW project enables the shareholding councils to benefit from existing relationships with Iwi to deliver on its purpose (eg to identify cost effective solutions to resource consents).

Under WWL are we going to be paying for our neighbouring council’s infrastructure as well?

There is no requirement for prices to be the same across communities.  This allows for differences in customer charges across the CCO depending on investment need and cost of service. 

All financial modelling to date for WWDW assumes existing pricing structures and work programmes forecast in each of the councils long term plans, stay the same after the transition of water services to WWL in the short to medium term. 

In order to meet financial independence, the CCO Board and management will be responsible for setting future pricing. Any changes to pricing will be set out in a document referred to as a water services strategy which will be brought to the SRF for comment.  

The Commerce Commission will be responsible for providing independent oversight to ensure prices are reasonable, benchmarked and sustainable.

Where is the Establishment Team/CCO going to be based?

Options are currently being investigated.

A location for the Establishment Team should be finalised within the next three-four weeks (and will be subject to council formal decision making).

Factors that need to be taken into account are:

• big enough to accommodate up to 40 staff when all are on board
• easily accessible to people from around the entire WWDW council whanau (particularly for staff who will be seconded from their district)
• efficient transport links to minimise driving/travel costs
• well networked and able to accommodate flexible working environment
• good meeting rooms and enough wall space for workshops
• has amenity that contributes to a pleasant and comfortable working environment.

Issues councils are facing that have led the Government to introduce Local Water Done Well.

Costs

All of local government has had to face significant increases to their costs. The capacity of residents to pay more in rates is at its peak and councils are limited in the ways they can raise money - particularly for expensive, long term infrastructure. Many councils have reached their limits for borrowing.

Estimates show that New Zealand needs to spend between $120 billion and $185 billion on water infrastructure over the next 30 years.

Local Water Done Well enables councils to increase their access to funding without it affecting their balance sheet.

Over the past three years, local government costs have significantly gone up:

• Bridges are 38% more expensive to build
• Sewage systems are 30% more expensive to build
• Roads and water supply system are 27% more expensive to build

The CPI – inflation - was between 2 and 7%

[source: Brad Olsen, Infometrics]

Insurance premiums for councils have also increased significantly (+15%) in the last three years – far more than the rate of inflation.

Old age/storm damage

Aging waters infrastructure that is breaking, overloaded or has reached the natural end of life and needs to be replaced.

Storm events are becoming more frequent and can cause immense localised damage.

Local Water Done Well provides a pathway for councils to plan and deliver upgrades (or new infrastructure) in the most strategic and timely way.

There is an unfair expectation/requirement for today’s property owners to fund urgent infrastructure fixes (yet the beneficiaries of that infrastructure could be enjoying the benefit for the next 50-100 years).

Population growth

The number of people in our towns and villages is either growing fast (and needs to be catered for) or is widely spread out in little clusters.

Many towns and villages have intake or treatment plants that were built in the “good old days” when there were not the standards there are today (and certainly not the increased standards there are going to be introduced under new regulations). These old systems need costly upgrades and replacements to cope with population growth.

Competing demands

Single councils struggle to afford all their community wants/needs and have to make trade-offs all the time eg new pipes/treatment plants v resealing country roads v a playground v a library or community centre v insurance v meeting new regulations v maintaining parks and sports fields v treating waste water to the required standards etc.

Setting aside tens of millions to fund just one future treatment plant is a tough ask for any single community, for example a Wastewater Treatment Plant in Cambridge is expected to cost $100M and in Matamata $60M.

Separating out waters services from rates funding can free up rates capital for other infrastructure and services.

More regulation

Under Local Water Done Well, there are to be three regulators for waters services - the Regional Council, Taumata Arowai and the Commerce Commission.

The intent is that water services are moving to “whole of system” regulation rather than the current ‘end of pipe’ regulation.

This is a significant change for councils – regardless of whether they go into a CCO or joint arrangement or whether they decide to keep an in-house business unit.

Costs are going to go up.

Workforce planning staff

Individually, each council requires a highly skilled workforce to provide and deliver quality water services.

A CCO, like Waikato Waters Ltd, offers the geographic reach, scale and vision to be a compelling proposition for prospective employees. It would give staff line of sight of councils’ collective intentions and a future career pathway.

A joint CCO makes service delivery more resilient, particularly for smaller councils where operations can be highly dependent on a few individuals.

Councils must:

• analyse a range of options for water services delivery
• choose a preferred option
• consult their communities on their preferred option
• receive feedback and make a final decision by the end of June 2025
• include the decision in a Water Services Delivery Plan together with the timeline for implementing that decision
• submit the Water Services Delivery Plan to the Minister of Local Government (via Department of Internal Affairs) by 3 September 2025
• start implementing the WSDP from 1 July 2026

A Water Services Delivery Plan (WSDP):

• is a one-off plan councils are required to submit under Local Water Done Well
• must include detailed information about water services operations, assets, revenue, expenditure, pricing, future capital expenditure, and how councils plan to
• finance and deliver their preferred model
• must demonstrate how the water services will be financially sustainable* by June 2028.

*Financial sustainability means water services revenue [income] is sufficient to meet the costs of delivering water services.

Water Services Delivery Plans are for a minimum ten-year timeframe but can be up to 30 years.

The Water Services Delivery Plan must be certified as true by the Chief Executive, signed off by the elected council and submitted to the Minister for Local Government by September 2025.

• 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.

The seven councils that signed the Heads of Agreement are:

• Hauraki District
• Matamata-Piako District
• Ōtorohanga District
• South Waikato District
• Taupō District
• Waipā District
• Waitomo District Council

Waikato Water Done Well has also been strongly supported by Waikato Regional Council to date.

Each council must decide if Waikato Water Done Well is going to be their preferred option to consult on before May 2025.

The Heads of Agreement does not commit individual councils to confirm Waikato Water Done Well as a preferred option – just that they will contribute to the analysis.

Each council is also analysing other options and may choose to go with one of those instead eg going it alone or joining with different councils.

Council’s assessed their local needs as follows:

The full proposal for Waikato Water Done Well can be found here. 

The following diagram is a summary of how the ownership and accountability will operate.

Together the seven councils have…

• 41% of the region’s population (205,000 people)
• growth higher than the national average of 2.07% - ranging between 3% to10.2% over the last five years
• 39% of the region’s water and wastewater connections (>129,000)
• 45% of the region’s water services annual revenue (excluding development contributions) at $154m.

Waikato Water Done Well is a model that offers the participating councils a range of benefits.

1. Enables a catchment-based approach for water quality, infrastructure planning and construction, regulatory requirements and consenting
2. Enables water service/s delivery to be managed more efficiently and so become more affordable
3. Enables greater ability to borrow money (over a longer period of time) so much needed waters infrastructure can be constructed
4. Enables opportunities for a skilled, sustainable and community-based waters workforce
5. Enables more focus on customers/people
6. Enables standardised data, analysis, compliance, processes eg resource consents
7. Enables local control to be retained through the way the CCO is structured
8. Enables broader expectations to be met eg Treaty settlement obligations, investment in regional catchment solutions, economic growth
9. Enables visibility of the actual costs of waters services (not buried within or subsidised by other council activities)
10. Enables rates income to be reduced or potentially diverted to other community needs.

Efficiencies include:

• access to lower interest financing
• one asset management plan informed by councils’ long-term infrastructure strategies and spatial plans
• a single combined capital works programme equals greater bargaining power for procurement of services
• streamlining of processes
• reduced duplication
• pooling of resources
• smart consenting – integrated approach on catchment-wide basis
• consolidated data collection.

Operational efficiencies can be enhanced by working across current Council boundaries eg the Morrinsville water supply catchment is in the Waipa district and the treatment plant is close to Cambridge as it is to Morrinsville, and the Paeroa Wastewater Plant is closer to Te Aroha than Te Aroha is to Matamata. 

Map of Assets

Affordability can be improved under the Waikato Water Done Well model in a couple of ways.

First, because the CCO can borrow more over a longer period, it can use that debt to hold water charges comparatively lower. That makes sense. Using debt to fund the investment in long life assets (some of which have a lifespan of 75-100 years) means the cost can be spread across the generations who use them (this is like paying your mortgage off over 30 years rather than 10 - it is cheaper per month).

Secondly, the Waikato Water Done Well model can deliver savings because: 

• increased scale brings opportunities for investments in efficiencies that smaller councils can’t justify  
• certainty of revenue streams, independent of political cycles, allows for optimisation of capital delivery across years and across the region. This provides certainty to contractors who can then invest in more machinery and people. And because they have greater confidence in on-going work, they can also price their services at a comparatively lower point.

Cumulative net cost savings over the next 15 years for councils under Waikato Water Done Well…

Those savings could be used to pay back some debt, build more needed infrastructure or give back to communities in lower water charges.

Ultimately it will be up to the Board to decide what water charges are. But being able to borrow more and the savings from operating at scale mean that it has the ability to keep water more affordable than any one council could.

The short answer is no.  At the start, the CCO will continue to charge for water in the same way as councils intended in the long-term plan that was in place when the CCO was established.  The new water services legislation will require the CCO to set out its intended price increases from 1 July 2027.  This will have to align with the expectations of councils.

An expectation that councils have already communicated is that the CCO must target price increases lower than what councils could achieve on their own.  The future price path is likely to have differences in prices across districts 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.  This will be sharing the benefits of what is realised from working together across communities.

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 council 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.

Hamilton City and Waikato District have agreed to develop a different option to put to their communities.

And while both approaches acknowledge there is value in having one Waikato-wide CCO in the long term, for now, each grouping is on a different path to get there.

Thames Coromandel District (also part of the Waikato) is looking at different options also.

Waikato Water Done Well initial focus is on the delivery of water and wastewater services.
Stormwater services will remain in each council until such time as they decide to contract these services to the CCO.

In the meantime, councils would remain responsible for setting the level of service and rates for stormwater – but also to ring fence the costs of these services. 

No.

You will be billed for water and wastewater (sewerage) by either your Council or the Waikato CCO.

If your Council transitions to the Waikato CCO the bill may continue to come from your 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. 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 Waikato Waters. 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 (Waikato Waters Ltd) then they will be the provider of water and wastewater services across the area of the partner councils. Individual households/businesses will become customers of Waikato Waters noting that each council remains a shareholder in the new organisation.

Yes, with the approval of the existing council shareholders

From late 2026, once Waikato Waters Ltd is fully operational, councils that did not opt into the initial offering, may be able to join.

Waikato Waters is expected to be established in 2025 but it would not begin full operations until the first half of 2026.

Each council will determine the timing of its transition into the CCO.

All revenue collected by Waikato Waters Ltd 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.

From 1 July to 2026, the CCO will be making an operating surplus.

The "Cumulative Net Cost Savings" graph (see Financials) shows the payback on the money we are investing to make efficiencies.

As councils transfer their water services business into Waikato Waters, shares would be allocated based on the number of water/wastewater connections.

Before any assets are transferred to Waikato Waters balance sheet, their value would be determined using an agreed valuation method.

In addition to the powers of intervention under the Local Government Act, the Minister can appoint a Crown water services specialist if a Water Services Delivery Plan:

• is not submitted
• is not compliant with the legislative requirements (and amendments requested by officials are not made)
• is not being given effect to. 

Depending on the terms of appointment, a Crown water services specialist can:

• prepare a Water Services Delivery Plan for the relevant council(s)
• direct a specific Water Services Delivery Plan be adopted 
• assist the council(s) giving effect to an accepted Water Services Delivery Plan. 

A Crown facilitator can also be appointed if there are problems preparing a Water Services Delivery Plan or implementing.  As the name implies, their role is more facilitative whereas the Crown water services specialist can be directive.