Northland Water Done Well

Across the nation, councils are facing big challenges relating to the delivery of drinking water, wastewater and stormwater services.  

Local Water Done Well is the coalition Government's plan to address New Zealand’s long-standing water challenges and replaces the previous Government's Three Waters reform programme.

It empowers communities and councils to determine how their water services will be delivered in the future while meeting increased regulatory requirements and quality standards, being financially sustainable and supporting forecasted growth.

The policy also encourages councils to work with neighbouring districts on solutions that could benefit larger regions.  

Councils have been investigating options for water service delivery into the future, seeking community feedback, and preparing Water Service Delivery Plans which were submitted to the Government in early September 2025. 

For more information about Local Water Done Well, visit the Department of Internal Affairs website:  

Water Services Policy and Legislation (dia.govt.nz)

A Water Services Delivery Plan is a one-off plan that water service providers were required to submit under Local Water Done Well before 3 September 2025.

It needs to explain how the water services will be delivered and demonstrate financially sustainability by June 2028. The plans must be for a minimum 10-year timeframe but can be up to 30 years. 

It 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. 

A joint Water Services Delivery Plan was adopted by all three of Northland’s district councils in August 2025 and approved by the Department of Internal Affairs in early October 2025. You can read this plan below.

Water Services Delivery Plan(PDF, 12MB) (large file)

A council-controlled organisation (CCO) is an organisation that is owned by a council / councils 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.

The two-waters Northland CCO will be a new organisation that will deliver drinking water and wastewater services on behalf of each of the shareholding councils – Whangarei District Council, Kaipara District Council and Far North District Council. It will do this from July 2027 when it becomes operational.

Stormwater assets will remain with their respective councils in terms of decision making and costs, however a shared service arrangement may be made with the CCO for operations.

This is because many critical parts of the system are shared across other council services too. For example, roads drain stormwater during heavy rain, and green spaces in parks and reserves are often designed to capture excess water where possible.

Establishment of the new water services entity will be carried out in three phases:

1. The scoping and preparation phase, running from September 2025 until June 2026 – This phase focuses on establishing the governance and operational foundation needed for the successful implementation of the CCO. During this phase, several key foundation documents will be developed, including a constitution, shareholders agreement and a statement of expectations. An implementation plan for Phase 2 will also be developed, and strong leadership is recruited.
2. The establishment and transition phase, from June 2026 to July 2027 – This phase sees the CCO become incorporated as a separate legal entity and the start of transitional and operational activities required to establish a standalone business. During this phase, a water services strategy and budget will be developed, including strategies, policies and procedures for asset management, capital delivery, technology, operations, funding, financing, governance, legal and risk management.
3. The go-live and operational phase, commencing in July 2027 – This phase marks the full transition of service delivery responsibilities to the newly established CCO as an independent entity with its own governance and operational teams. While some transition activities may still be required, the structure will take a form that supports business as usual operation.

Leadership

Whangarei District Council’s General Manager for Waters, Andrew Carvell, has been seconded to lead the scoping and preparation phase of implementation on behalf of the three district councils as Waters Implementation Programme Director until a CEO is appointed mid-2026. 

Establishment is overseen by the Elected Members Steering Group, made up of the mayors and two councillors from each district, until mid-2026 when a Shareholder Representative Group is established. 

An external Establishment Advisory Group has also been formed to provide independent assurance and professional advice to elected members and operational teams until a permanent board of directors is confirmed in mid-2026.

The three district councils have agreed to a budget of $1.5m for the first phase of implementation (scoping and preparation) at a council meeting in August 2025.  

A forecast of total establishment costs, based on the likely scope, timeframes and resource costs to deliver, is tentatively estimated at $8m to $15m. This consists of approximately $5m to $8m in establishment costs alongside $3m to $7m in IT costs (both implementation and licensing costs).

The final establishment budget would need to be refined based on stakeholder expectations. 

Local Water Done Well legislation requires the appointment of a CEO and a competency-based board of directors.

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

Councils will be represented by a Shareholder Representative Group, which will include two representatives from each founding council, of which at least one will be an elected member.

The Shareholder Representative Group’s role will be to represent its shareholders and hold the CCO to account via a Statement of Expectations.

Following each council’s adoption of the joint water services delivery plan, a commitment agreement was signed by each council’s Chief Executive.

This agreement included that Whangarei District Council is to be the lead council whose responsibilities include:  

• managing project expenditure and tracing against the project budget 
• preparing agendas and scheduling governance meetings for the project 
• preparing reporting for governance meetings for the project  
• entering into agreements for the benefit of the project.

This is yet to be confirmed, however legislation provides five options for how shares can be allocated across councils. These include:  

1. Population allocation: Shares are allocated based on the proportionate population of its service area and updated as these figures change over time.  
2. Connections allocation: Shares are allocated based on the number of water connections and updated as these figures change over time. 
3. Net asset allocation: Shares are allocated based on the total net value of the council’s assets transferred to the CCO at the time of establishment.  
4. Equal proportion allocation: Shares are allocated to each council equally. 
5. Combination: Shares are allocated through a combination of the methods above. For example, 50% of the shares could be allocated based on number of water connections and 50% based on net asset value. 

Whangarei District Council has used funding from ratepayers to invest heavily in water infrastructure in the past and, compared with many other councils, we are in good shape to meet our District’s current and future water service needs.  

We investigated and consulted on two options for water services delivery between 2 April and 2 May 2025. These included: 

• Option 1 (our preferred option): In-house business unit with increased collaboration with Northland councils 
• Option 2: Northland Council Controlled Organisation (CCO) with Kaipara District Council and Far North District Council (drinking water and wastewater only). 

More information on each option can be found in our consultation document: 

Local Water Done Well consultation document(PDF, 512KB)

We received 73 submissions, with overall sentiment weighted in favour of Option 1. Of the submissions related to Local Water Done Well, approximately 73% leaned towards option 1, while 19% leaned toward option 2, and 8% did not show a clear preference.  

Following community consultation, Northland's district councils formed a cross-council elected members steering group to explore collaboration options.

After carefully assessing the benefits and risks of the various options proposed by each district and the results of community consultation, it concluded that a Northland Council Controlled Organisation (CCO) offered the strongest path forward for the region.  

A full report of submissions can be found in the appendices of the 28 May 2025 Council Briefing agenda: 

Council briefing agenda, 28 May 2025

With Whangarei’s water services in comparatively good shape and its assets carrying very little debt, a key concern for Whangarei District Council and the community was that Whangārei may end up cross-subsidising water costs for neighbouring districts if a CCO was formed.  

To start with, the CCO will use a financial model that recognises the different starting points of each council in terms of water assets, debt levels and infrastructure investment needs.

The CCO will see financials ring-fenced for each district and water charges will be non-harmonised, meaning water charges will be different for residents in each district.

This will be reviewed within the first three years of operations, but doesn’t necessarily mean the model will change at that time.  

Whangarei District Council will also transfer $100 million of debt to the CCO at inception, which will significantly reduce Whangarei District Council’s overall debt levels and ensure that the contributions from the three councils to the CCO balance sheet are better aligned from day one.  

The cost of delivering water services is expected to increase in the future, no matter how they are delivered. This comes down to increasing regulatory requirements, the rising costs of maintenance and renewals, and the need to invest in infrastructure to ensure we prepare for future growth and respond to extreme weather. 

Today, Whangarei District Council covers water costs almost entirely with funding from ratepayers with very low levels of debt on our water assets.

To help manage the expected rise in water costs in the future, the CCO will use debt to fund some assets and therefore share the assets’ costs between current and future users.

Using this approach means all the people using an asset end up paying for it over its lifetime, and water charges for Whangārei users could come down, or increase at a lesser rate.  

The CCO will also start with non-harmonised water charges, meaning water charges are different for ratepayers in each district. For Whangārei, this means water charges would not increase more than they would if services were kept in-house. This will be reviewed within the first three years of operations, but doesn’t necessarily mean the model will change at that time.  

As the economic regulator for water services under the Local Water Done Well regime, the Commerce Commission will  promote consumer interests and help ensure customers receive value for money for the services provided. 

Financially, Whangarei District Council is in a strong position to absorb the changes brought about by water services being separated from council.

Our Long Term Plan and Financial Strategy laid the groundwork for changes under Local Water Done Well and there is headroom to incur debt if it were required due to the loss of revenue generated from water services.  

It is likely there will be impact on some staff as Council adjusts to service a slightly smaller operation and some staff may transition to the water CCO.

The CCO will be operational from July 2027 and  we will use the establishment and transition phase to work through options. 

No. We anticipate the new CCO will maintain the same high level of service delivery our District enjoys today.

While current projects will continue under the new CCO, projects will need to be prioritised based on the need across the region, as opposed to one district.

Prioritisation will consider health and safety, compliance, renewals, environmental impacts and growth as we do today.

• March 2025: Modelling of different water service delivery options is finalised.
• 27 March 2025: Councillors vote on preferred option.
• 2 April to 2 May 2025: Consultation period.
• July 2025: Councils adopt preferred option.
• July to September 2025: All three district councils work together to prepare a Water Services Delivery Plan and must submit it to Central Government by 3 September 2025.
• October to December 2025: Central Government reviews the Water Services Delivery Plan while councils define partnership terms, key principles and key documents, including legal and foundational agreements.
• January to March 2026: Foundational principles are confirmed, technology systems are reviewed, the implementation plan is finalised and a potential trading name is identified.
• March to June 2026: Foundational documents are ratified, trading name is confirmed, key leadership and governance structures are established, the implementation team is onboarded, an office location is secured, and compliance is assessed across councils. 
• July 2026 to June 2027: Transfer agreement is executed, the water services strategy is approved, and transition period begins.