Frequently asked questions

Local Water Done Well (LWDW) is aGovernment-led reform aimed at addressing long-standing drinking water, wastewater and stormwater infrastructure challenges across the country. It is intended to address inconsistencies in water services delivery and promote access by the community to safe, reliable and sustainable water services.

While the reforms provide some local flexibility on how this is achieved, it puts a strong emphasis on compliance with central government rules and regulations.

LWDW requires all councils to prepare a Water Services Delivery Plan by September 2025. But first, as part of forming the Plan, we need to identify a proposed water services delivery model.

We have considered several potential water services delivery models to make sure we end up choosing one that is right for Ōtepoti Dunedin.

Two models have emerged as being potentially suitable:

Option One - In-house model (our proposal) – the DCC continues to own water infrastructure and be responsible for the delivery of water services, with some changes to ensure we meet new regulatory and financial requirements.

Option Two - Water Services Council Controlled Organisation model (CCO)– the DCC sets up a new company to own water infrastructure and be responsible for the delivery of water services. The DCC would be the sole shareholder in the company.

Under both models, the amount you pay for water services will rise. The cost could perhaps even double over the next 9 years no matter which model we go with.

We don’t know if the way we charge now will be the same in coming years (e.g., if government regulators require change).

When using a per connection charge (which includes all connections for households, businesses and other properties), the annual water services charge over the next 9 years is forecast to:

• increase from $2024 to $4280 under the in-house model
• increase from $2024 to $4202 under the CCO model.

(Note that this calculation does not reflect the current method of charging.)

However, if the way we charge remains the same then:

• for households, the annual water services charge over the next 9 years is forecast to increase from $1366 to $2814 under the in-house model and to $2765 under the CCO model.

Financial modelling contains uncertainties and requires certain assumptions. The figures quoted above are therefore subject to change. They do, however, provide an indication of the level of expected cost increases.

The financial forecasts are discussed in detail in the consultation document, including charts and bar graphs.

Keep yourself informed on Council’s progress as we consult on both the in-house option and CCO option. Most importantly, ensure you have your say on the proposed Water Services Delivery Model options when Council consults on these from 31 March to 30 April 2025.

• DCC ownership and responsibility –DCC owns and manages around $4 billion of water assets. DCC would retain ownership of these assets and continue to be responsible for the delivery of water services.
• integrated management – The delivery of water services would be financially ringfenced and managed alongside other DCC functions, ensuring consistency and alignment with other functions (e.g., urban planning and transport). It would be easier to co-ordinate water services with other DCC services.
• control and accountability – The DCC (through its elected members) would continue to have direct control over water services, and direct community involvement and accountability
• debt limit of 280% – The DCC would have less access to debt than a CCO. The CCO could borrow up to 500% of its revenue, compared to DCC’s current borrowing limit of 280% of revenue.
• less debt and interest costs – Based on the same amount of work being done under each model, the in-house model is forecast to require less debt over the next 9 years than the CCO model ($157 million less) because DCC would be charging more to customers over the next 9 years. Under the in-house model, interest costs are forecast to be $35 million less than under the CCO model over the next 9 years.

• ownership and responsibility – water assets would be transferred to the CCO, and the CCO would be responsible for the delivery of water services.DCC would still be the indirect owner of the assets being the sole shareholder.
• integrated management –the CCO would solely provide the delivery of water services. There would need to be careful management to ensure that the CCO’s delivery of water services aligns with DCC’s other functions (e.g., urban planning and transport).
• control and accountability – the DCC would not have direct control over water services, but it would have indirect control as the sole shareholder in the CCO. The CCO would be accountable to DCC as its shareholder.
• debt limit of 500% – the CCO would have greater access to debt at 500% of revenue compared to the DCC’s current limit of 280% of revenue
• more debt and interest costs – based on the same amount of work being done under each model, the CCO model is forecast to require more debt over the next 9 years than the in-house model ($157 million more). Interest costs are forecast to be $35 million more over the next 9 years.

We considered several possible models for delivering water services before deciding to consult on the in-house model and the CCO model.

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 Ōtepoti Dunedin. This includes how best to address flooding and climate change issues across the city, e.g., in South Dunedin.

You can find further information on the other options and how we reached our decision to consult on these two models at www.dunedin.govt.nz/LWDW

A shared services arrangement between the DCC and Christchurch City Council (CCC) is being investigated to identify if there could be reduced costs and enhanced water service delivery for both councils.

No, we still need to make a choice about which model should deliver our water services. The investigation into a shared services arrangement with CCC does not affect that need. Any arrangement would not affect the ownership of each council’s existing water assets. It would be managed through a contract rather than a shared entity, so it is possible under both the in-house and CCO models.

‘3 waters’ is the standard term for the infrastructure supplying residents and businesses with drinking water, wastewater (what goes down your sink and shower plug hole, from your washing machine and your toilet) and stormwater (run off rain/melted snow caught by your house/work building gutters and street gutters) services.

We manage Dunedin’s water supply system, from source to tap. We collect, supply, treat and distribute water to residents and businesses in Dunedin and outlying areas. This includes drinking water, wastewater and stormwater.The system includes 21,000 hectares of water catchment, 14 water and wastewater treatment stations, 110 water, wastewater and stormwater pumping stations, 71 reservoirs (raw and treated water) and over 3,000km of pipes.

No matter which one of the water services delivery models is chosen for Ōtepoti Dunedin, LWDW reform states that ‘ringfencing’ of water services is critical for financial sustainability and revenue sufficiency.

Ringfencing requires that:

• All water revenues be spent on water services; and
• All water services charges and expenses be transparent and accountable.

It means the revenue from the DCC’s delivery of water services is sufficient to ensure its long-term investment in delivering those water services; and that the DCC is financially able to meet all regulatory standards and requirements for its delivery of those water services.

Find out more about the financial requirements LWDW places on all Water Services Delivery models at www.dunedin.govt.nz/LWDW

For information explaining how Local Water Done Well reform is rolling out nationally, we recommend looking at the Department of Internal Affairs web page Water Services Policy and Legislation - dia.govt.nz