Our proposal - Keeping water services in-house
Direct control within the Council’s existing structure with financial ring-fencing.
Consultation open
What is Local Water Done Well?
Local Water Done Well is a government-led reform aimed at addressing long-standing water supply, wastewater and stormwater infrastructure challenges across the country. It is intended to address inconsistencies in water service delivery and ensure that every community has access to safe, reliable, and sustainable water services. It provides some local flexibility on how this is achieved; however, the reform puts a strong emphasis on compliance with central government rules and regulations.
At its core, the Local Water Done Well reform is guided by a few key principles:
 |  |  |
| Water services must be financially sustainable, with sufficient revenue for long-term investment. | Delivery models should be fit-for-purpose, with the right structure and governance to meet both the mandated requirements and local needs. | There is an expectation that new, stricter rules for water services and infrastructure quality will drive investment. |
Local Water Done Well requires all councils to prepare a Water Services Delivery Plan and identify a proposed model for the delivery of water services.
To make sure we choose the water services delivery model that is right for Christchurch and Banks Peninsula we have carried out a thorough evaluation of the advantages, disadvantages and trade-offs of potential options. We also assessed in detail the impacts on key factors like rates, Council borrowing, levels of service, and potential costs for households.
What water services do we deliver?
The Council is responsible for planning, funding, building and maintaining the infrastructure and processes that help us provide these services. This includes ensuring they meet community needs, comply with environmental and quality standards, and address challenges such as population growth and climate change.
Water services delivery involves managing three essential areas
The Council is responsible for ensuring that the supply of water is safe to drink. The Council supplies water through approximately 160,000 residential and business connections, through seven urban water supply schemes and six rural water supply schemes. In a typical year, this equates to 50 to 55 billion litres of water, which is the equivalent of around 22,000 full Olympic-size swimming pools.
The Council collects wastewater from approximately 170,000 customers in Christchurch, Lyttelton, Diamond Harbour, Governors Bay, Akaroa, Duvauchelle, Tikao Bay and Wainui. It treats this wastewater at five treatment plants, with 98% serviced by the wastewater network for treatment at the Christchurch wastewater treatment plant. The Council holds resource consents for the treated wastewater to be discharged into the receiving environment, which includes into the sea, and provides for overflow into the stormwater network.
The stormwater network collects, conveys and treats stormwater during wet weather and is designed to work with secondary flow paths, such as roads. This activity is linked to and interdependent with flood protection and control works undertaken by the Council.
The Council adopts a multi-value approach to stormwater management, balancing the network’s drainage function with other values such as ecology, culture, recreation, heritage, and landscape.
What are the options?
We have carefully evaluated three water services delivery models to determine how well they align with Christchurch’s goals for providing water services and to ensure they comply with the Local Water Done Well reform.
We have identified what we believe is the best model for Christchurch based on our analysis. Additionally, we have provided details on two other viable options that we closely considered.
Deciding on the right delivery model involves more than simply meeting legal requirements. It is important that we thoroughly assess and compare various approaches to determine the option that best fits the unique needs of communities across Christchurch and Banks Peninsula.
The Council has a proven track record of delivering high-quality water services to residents. However, we view these reforms as an opportunity to potentially adopt a new approach that could further enhance the effectiveness, efficiency, and community responsiveness of these critical services.
-
Three Waters Council-Controlled Organisation
Separate entity focused solely on water supply, wastewater and stormwater services. Solely owned by Christchurch City Council.
Two Waters Council-Controlled Organisation
A hybrid model where water supply and wastewater services are transferred to a CCO, while stormwater remains under Council management.
Comparing the water services delivery models
All three delivery models have been evaluated against key criteria to compare how they align with the needs of our community and regulatory requirements.
Evaluates affordability, service quality, and long-term infrastructure investment to ensure ratepayers receive the best value.
Assesses the ability to meet existing and future water quality, environmental, and economic regulations.
Measures the model’s financial flexibility to fund operations, invest in infrastructure, and manage financial risks.
Examines the level of oversight, accountability, and alignment with Council priorities.
Evaluates the efficiency and reliability of service delivery and operational capabilities.
Assesses how well the model aligns with community priorities and incorporates stakeholder feedback.
Considers the complexity, cost, and risks associated with transitioning to the model.
Financial assessment
Each delivery model’s impact on rates, debt, borrowing capacity, and long-term sustainability has been evaluated. We have assessed whether the three delivery models are affordable, fiscally responsible, and capable of meeting Christchurch’s water services delivery needs without compromising service levels or financial stability.
What this means for residents
High-quality, reliable and affordable water services can be achieved under each model.
The key differences between models lie in governance arrangements, financial flexibility, and how costs are distributed among ratepayers. The decision on which model we include in our Water Services Delivery Plan will need to consider such factors. Our proposal is that the in-house model is the most suitable and practical choice for Christchurch.
Whatever model we end up choosing, the financial impact on rates and water services charges should remain about the same over time.
The in-house model would allow the Council to continue funding through a combination of targeted and general rates, or to explore alternatives like fixed charges or volumetric pricing. This approach would enable us to balance affordability with community expectations.
Both CCO models must transition to a system of direct charging for water services within five years of establishment. This would result in costs being based on fixed and volumetric pricing methods, moving away from property value-based charges. While this approach could lead to a usage-based system, it may also result in changes to how costs are distributed among users.
Current service levels for drinking water, wastewater, and stormwater are maintained or improved under all models.
Compliance with new legislative requirements and standards, such as those set by the Water Services Authority – Taumata Arowai, is required across all models. Regardless of the model chosen, service delivery will need to meet these requirements.
The CCO models may offer operational efficiencies and focused management, particularly for water supply and wastewater. This could enable quicker responses to infrastructure challenges.
The in-house model keeps governance and decision-making directly within the Council, ensuring strong local accountability through Council decision-making processes and better alignment with community priorities.
CCO models would introduce independent governance structures and a professional board, which may enhance operational focus and efficiencies. Council oversight would remain at a strategic level through governance arrangements and key accountability documents, which could impact how local concerns are addressed and prioritised.
In conclusion…
All water services delivery models – the in-house model, the Three Waters CCO, and the Two Waters CCO – can achieve financial sustainability and meet the current and anticipated regulatory requirements set by the government.
The in-house model stands out as a stable and consistent approach, prioritising financial prudence and maintaining the Council’s flexibility in determining how water services are charged to the community. By keeping water services under direct Council control, this model would ensure a high degree of accountability and allow for charges to be tailored to the specific needs and preferences of Christchurch residents.
On the other hand, both the CCO models offer the advantage of increased borrowing capacity and a specialised focus on water services management. These models are well-suited for situations that require accelerated investment in water infrastructure or enhanced governance structures to meet specific challenges or objectives.
Given Christchurch’s current circumstances and priorities, the additional borrowing capacity and specialised focus provided by the CCO models are not considered essential at this stage. The in-house model’s conservative approach to financial management and its ability to maintain direct Council control over water services align well with the city’s present needs and goals.
What is a water services CCO?
Make a submission
Submissions can be made until 11:59pm on Sunday 6 April 2025.
Ask a question
Open
Activity closes 06/04/2025 at 11:59 PM
We will get back to you as soon as possible, however for more technical questions this may take a number of days.
Contact Us
Have questions or want to learn more about a project? Contact us:
| letstalk@ccc.govt.nz |
