About Local Water Done Well
Early this year, we’ll be asking you to share your thoughts on how Palmerston North’s water services should be managed in the future. This will be one of the most important decisions for our city, and it’s essential everyone has their say.
Palmy’s water management
Our city has developed a safe, resilient water supply. Our Council (and you, our community) own our water assets. We determine the work that needs to be done in the future, ensure we meet all the legal requirements, and make sure your day-to-day water needs are met. You also help pay for this through your rates and have your say during a range of different consultations.
Why change the way water services are managed?
Discussions about water service management have been ongoing since 2016, when the Havelock North water contamination crisis highlighted vulnerabilities in New Zealand’s water systems. Since then, the need for a coordinated, high-standard approach to water management across the country has only grown.
The previous government proposed Three Waters reforms to manage water across regions under 4 large organisations. However, under the coalition government, this has been repealed and replaced by Local Water Done Well, which allows each council to choose the best model for its community. Options could include managing services in-house, partnering with other councils, or setting up new organisations or trusts.
Under this model, councils must meet these requirements:
- Fit-for-purpose delivery and funding models.
- Financially sustainable water services – this means that water projects must be fully funded and ringfenced from other council spending and investment.
- Greater government oversight, with economic and quality regulation.
Water will cost more in the future
In 2024/25 our ratepayers pay $1,000 a year for day-to-day water services, and part of the general rate covers the cost of construction projects and paying off debt. Trade waste customers (businesses that use water and create wastewater) also pay for water through set fees.
Different councils charge differently for water, and some councils use water meters to do this. If councils collaborate to create a water services organisation, there will need to be conversations about how paying for water works to ensure it’s consistent across different areas.
Councils and the government agree that water will cost all communities a lot more in the future – regardless of what option we proceed with. That’s due to a range of things like mitigation for climate change to reduce the chance of flooding, population and industrial growth, replacing or upgrading ageing infrastructure, new standards increasing the cost of compliance, improvements in technology, health requirements and government policy.
Considering the best options for Palmy
Our team have been working hard to consider the best way forward for our city’s water services. This includes financial analysis, costing future projects, and exploring potential water agency models.
We’ll have three options for our community to consider. They are:
- Option 1: In-house business model: This option is essentially what we do now, but it is unlikely to meet legislative requirements for financial sustainability.
- Option 2: A multi-council-owned organisation with Palmerston North, Horowhenua, Manawatū and Kāpiti Coast councils: This option would see the 4 councils collaborate to have a joint independent council-controlled organisation. Working with these 4 councils would give a good level of scale that is likely to improve efficiencies and be cost-effective for communities.
- Option 3: A multi-council organisation with councils in the Horizons area: This option is the same as option 3 but could see us form with one or more other councils from within our regional council boundary (Whanganui, Rangitīkei, Tararua, Manawatū, Horowhenua and Ruapehu). Depending on the councils involved, this option could create efficiencies and improve cost-effectiveness for communities, based on size and scale.
Our elected members have identified option 2 as the preferred option. That’s the option with us collaborating with Kāpiti, Horowhenua and Manawatū. They’ve identified it as preferred at this stage because it’s the most cost-effective, we’re geographically close, our communities of interest are similar, and it’s got a good mix of urban, rural and coastal communities. While it is the preferred option at this stage, we still need to get community feedback on the options so that could change.
Our elected members have also ruled out a fourth option, a single Palmerston North City Council-controlled organisation. That’s because it would not be cost-effective for our community and therefore is unlikely to meet legislative requirements in the long term.
Where does Nature Calls fit in?
Nature Calls, our major wastewater project, is continuing. As we’ve worked on the options, all councils have shared their long-term plans and infrastructure strategies. That means we have all been able to model the costs for our communities with all water projects included over the next 30 years. Nature Calls is just one of those projects. While our council has Nature Calls in the short term, all other councils have large water projects in the coming decades, too.
When and how to have your say on water service options
We’re not consulting until mid/late February as we needed to wait for the government’s final bill to ensure we have all the info we need to give to our community.
Council will meet again on 5 February to discuss consultation material, then we’ll look to get feedback from around 20 February. That date could change if we need more time to pull information together.
During consultation we’ll be able to provide far more detail about each of the options, including the potential future costs.
We’ll keep you informed about when the consultation will open. Details will be available on our website, at libraries, and through information in your letterbox. We’ll also use social media, posters, and face-to-face events to answer questions.
What happens after public feedback?
After gathering community feedback, our elected members will make a final decision on the future model for Palmy’s water services. This decision will inform our water services plan – a long-term document that outlines our infrastructure needs, funding strategies, and the chosen delivery model. We need to submit this plan to the government by September 2025.
For more on the government’s requirements, visit Water Services Policy and Legislation | dia.govt.nz
Our elected members are concerned and feel uncomfortable about the pace needed to meet the government guidelines. In our Council meetings, they’ve said they don’t think it’s OK for our community not to have the full details needed to provide thorough feedback, nor for them to make good decisions about such a significant decision.