Let's Talk Water Reform

Water reform as part of the Government’s Local Water Done Well legislation means big changes are coming to the way our water is delivered and paid for.

This is one of the most important issues your Council will have to decide on as part of the current term, and it’s one we are taking very seriously.

It is highly likely that the rates and user charges paid by our ratepayers for water will need to increase significantly to meet the requirements set down by Government.

We are currently consulting with our communities on two options for the future of water service delivery. Consultation is open until 5pm Friday 13 June, 2025

Click here to read the Local Water Done Well consultation document.

Let us know what you think

Click here to fill in the Local Water Done Well survey.

What is Local Water Done Well?

In December 2023 the Government announced a new direction for water services (drinking water, wastewater and stormwater services) policy and legislation which it has called Local Water Done Well. This has replaced the previous government’s The Water Services Reform Programme (formerly known as Three Waters).

The Government’s intention is to ensure people pay cost-reflective prices for water services, that those services are delivered to an acceptable quality, and that water services providers are investing sufficiently in infrastructure.

Key components of Local Water Done Well include:

  • Fit-for-purpose service delivery models and financing tools
  • Ensuring water services are financially sustainable
  • Introducing greater central government oversight, economic and quality regulation

As part of this reform, local councils have to look at alternative ways to deliver water services and develop a Water Service Delivery Plan.

Read more on the Local Water Done Well legislation here. 

What is a Water Service Delivery Plan?

Water Services Delivery Plans are a way for councils to demonstrate their commitment to deliver water services that meet regulatory requirements, support growth and urban development, and that are financially sustainable.

Through the development of these plans, councils will provide an assessment of their water infrastructure, how much they need to invest, and how they plan to finance and deliver it through their preferred water service delivery model.

Plans must include an implementation plan that sets out how the council will deliver the new model or arrangements for delivering water services that is proposed in their plan.

Councils are required to prepare Water Service Delivery Plans, either individually or with other councils, by 3 September 2025.

What are our options?

We have looked closely at the options the government has provided to all councils, and we believe there are two broad options available to us for the future of water service delivery – either team up with our neighbouring councils, or go it alone.

Option 1 – Delivering water services ‘in-house’

Under this option, we would continue to deliver water services through Council, but we’ll need to make some changes to meet the government’s new requirements.

We would set up a dedicated internal water services unit, with some changes to the way these services are governed and managed to ensure compliance with ring-fencing and other regulatory requirements.


Option 2 – Join a new multi-council water services organisation with some of our nearby councils.

The organisation would own, operate and maintain water services for all shareholding councils. We would own part of this organisation, and provide it direction through a special ‘Statement of Expectations’, which the water services organisation would need to give effect to.

This option has several variants depending on which councils wish to partner with us.

In this option we have two potential combinations:

  • A four-council option, together with, Waimate, Timaru and Waitaki districts.
  • A three-council option, together with Waimate and Timaru districts.

There is some variation between these two sub-options but if we are to join one of these organisations, we will look further at the option that best meets the needs of our community. This would include looking at our common interests and priorities for water services, geographic similarities, the level of influence we would have, and what water services could cost our community.

These combinations could change depending on the final decisions from other councils


Our council has debated both options and believe that there are more benefits and slightly less costs by teaming up with our neighbours (Option 2)

Please read our consultation document to find out more about the details of the options, including the pros and cons of each.

Click here to read the Local Water Done Well consultation document.

Regardless of which option is progressed, water services will remain in Council ownership and water services will still be delivered. However, how this happens will change and will impact our community.

What has become clear, is that regardless of the option, it is highly likely that the rates and user charges paid by ratepayers for water will need to increase significantly to meet the requirements set down by Government.

Mackenzie District Water Assets

The provision of Three Waters (drinking water, wastewater and stormwater services) is a core council function that ensures public health, protection of assets, delivers community wellbeing and safeguards the environment.

Three Waters infrastructure comprises treatment facilities, pipes, pump stations and other assets that represent a significant council investment over many years.

The three main town centres of Fairlie, Takapō/Tekapo and Twizel have Three Waters services. Council also has water supply schemes in Burkes Pass and Allandale, and a wastewater scheme in Burkes Pass.

There is also the Albury Water Supply which supplies water to the surrounding rural area. The Albury township supply is connected to the Downland Water Supply (not managed by Council).  

Total replacement value of our three waters network is $124 million

Click the below image to view a summary of our district's water assets.


Why are costs expected to rise?

There are a number of reasons why costs are going to rise, including increasing regulatory standards (particularly for wastewater treatment and disposal) which will cost more to meet, historic underfunding of the water network to keep rates low, and the effects of rapid and ongoing population growth. These are issues that are being seen across the country, as councils grapple with Government driven water reforms.

The Mackenzie District, like other popular tourist destinations also has a high number of visitors in relation to our small ratepayer base. This puts additional pressure on our infrastructure, but we are unable to recoup the costs of this additional demand.

A key driver of the need to increase water rates is the fact that over the next 30 years we will need to invest over $200m into our Three Waters network. In particular we have been planning for significant upgrades and renewals to the wastewater treatment plants in Fairlie, Takapō, Burkes Pass and Twizel to ensure they remain compliant and fit for purpose when their current consents expire in late 2030’s to 2040’s.

In addition, the Government now requires that three waters finances are ‘ringfenced’. This means we can only pay for spending on three waters with the income we directly receive from ratepayers and other sources. Historically we have funded three waters through a mix of targeted rates and general rates, but the in future this ‘top up’ from general rates cannot occur. Our water charges must therefore increase to offset this.

Essentially, we need to increase rates now so that we can meet the government’s expectations for an appropriate level of investment that meets all renewal, growth, level of service, and regulatory requirements over the next 30-years.

How can you find out more and have your say?

This is one of the most significant changes to water services in a generation – please take the time to read through the information online and have your say.

Consultation document

Please read the below consultation document to understand the pros and cons of each option.

MDC Local Water Done Well Consultation Document [PDF]

Hard copies of this information is available at all MDC offices across the district.

Drop in Sessions

Come to a Public Drop-in Session to discuss the options with the MDC team.

  • Tuesday 13 May - Fairlie - 4.30pm - 6pm, Mackenzie Community Centre
  • Monday 19 May - Tekapo - 4.30pm - 6pm, Lake Tekapo Community Centre
  • Wednesday 21 May - Twizel - 4.30pm - 6pm, Twizel Events Centre
  • Thursday 22 May - Online - 4.30pm - 6pm (details TBC)

Survey

Click here to fill out the Local Water Done Well survey

Public consultation is open until 5pm, Friday 13 June

Water reform as part of the Government’s Local Water Done Well legislation means big changes are coming to the way our water is delivered and paid for.

This is one of the most important issues your Council will have to decide on as part of the current term, and it’s one we are taking very seriously.

It is highly likely that the rates and user charges paid by our ratepayers for water will need to increase significantly to meet the requirements set down by Government.

We are currently consulting with our communities on two options for the future of water service delivery. Consultation is open until 5pm Friday 13 June, 2025

Click here to read the Local Water Done Well consultation document.

Let us know what you think

Click here to fill in the Local Water Done Well survey.

What is Local Water Done Well?

In December 2023 the Government announced a new direction for water services (drinking water, wastewater and stormwater services) policy and legislation which it has called Local Water Done Well. This has replaced the previous government’s The Water Services Reform Programme (formerly known as Three Waters).

The Government’s intention is to ensure people pay cost-reflective prices for water services, that those services are delivered to an acceptable quality, and that water services providers are investing sufficiently in infrastructure.

Key components of Local Water Done Well include:

  • Fit-for-purpose service delivery models and financing tools
  • Ensuring water services are financially sustainable
  • Introducing greater central government oversight, economic and quality regulation

As part of this reform, local councils have to look at alternative ways to deliver water services and develop a Water Service Delivery Plan.

Read more on the Local Water Done Well legislation here. 

What is a Water Service Delivery Plan?

Water Services Delivery Plans are a way for councils to demonstrate their commitment to deliver water services that meet regulatory requirements, support growth and urban development, and that are financially sustainable.

Through the development of these plans, councils will provide an assessment of their water infrastructure, how much they need to invest, and how they plan to finance and deliver it through their preferred water service delivery model.

Plans must include an implementation plan that sets out how the council will deliver the new model or arrangements for delivering water services that is proposed in their plan.

Councils are required to prepare Water Service Delivery Plans, either individually or with other councils, by 3 September 2025.

What are our options?

We have looked closely at the options the government has provided to all councils, and we believe there are two broad options available to us for the future of water service delivery – either team up with our neighbouring councils, or go it alone.

Option 1 – Delivering water services ‘in-house’

Under this option, we would continue to deliver water services through Council, but we’ll need to make some changes to meet the government’s new requirements.

We would set up a dedicated internal water services unit, with some changes to the way these services are governed and managed to ensure compliance with ring-fencing and other regulatory requirements.


Option 2 – Join a new multi-council water services organisation with some of our nearby councils.

The organisation would own, operate and maintain water services for all shareholding councils. We would own part of this organisation, and provide it direction through a special ‘Statement of Expectations’, which the water services organisation would need to give effect to.

This option has several variants depending on which councils wish to partner with us.

In this option we have two potential combinations:

  • A four-council option, together with, Waimate, Timaru and Waitaki districts.
  • A three-council option, together with Waimate and Timaru districts.

There is some variation between these two sub-options but if we are to join one of these organisations, we will look further at the option that best meets the needs of our community. This would include looking at our common interests and priorities for water services, geographic similarities, the level of influence we would have, and what water services could cost our community.

These combinations could change depending on the final decisions from other councils


Our council has debated both options and believe that there are more benefits and slightly less costs by teaming up with our neighbours (Option 2)

Please read our consultation document to find out more about the details of the options, including the pros and cons of each.

Click here to read the Local Water Done Well consultation document.

Regardless of which option is progressed, water services will remain in Council ownership and water services will still be delivered. However, how this happens will change and will impact our community.

What has become clear, is that regardless of the option, it is highly likely that the rates and user charges paid by ratepayers for water will need to increase significantly to meet the requirements set down by Government.

Mackenzie District Water Assets

The provision of Three Waters (drinking water, wastewater and stormwater services) is a core council function that ensures public health, protection of assets, delivers community wellbeing and safeguards the environment.

Three Waters infrastructure comprises treatment facilities, pipes, pump stations and other assets that represent a significant council investment over many years.

The three main town centres of Fairlie, Takapō/Tekapo and Twizel have Three Waters services. Council also has water supply schemes in Burkes Pass and Allandale, and a wastewater scheme in Burkes Pass.

There is also the Albury Water Supply which supplies water to the surrounding rural area. The Albury township supply is connected to the Downland Water Supply (not managed by Council).  

Total replacement value of our three waters network is $124 million

Click the below image to view a summary of our district's water assets.


Why are costs expected to rise?

There are a number of reasons why costs are going to rise, including increasing regulatory standards (particularly for wastewater treatment and disposal) which will cost more to meet, historic underfunding of the water network to keep rates low, and the effects of rapid and ongoing population growth. These are issues that are being seen across the country, as councils grapple with Government driven water reforms.

The Mackenzie District, like other popular tourist destinations also has a high number of visitors in relation to our small ratepayer base. This puts additional pressure on our infrastructure, but we are unable to recoup the costs of this additional demand.

A key driver of the need to increase water rates is the fact that over the next 30 years we will need to invest over $200m into our Three Waters network. In particular we have been planning for significant upgrades and renewals to the wastewater treatment plants in Fairlie, Takapō, Burkes Pass and Twizel to ensure they remain compliant and fit for purpose when their current consents expire in late 2030’s to 2040’s.

In addition, the Government now requires that three waters finances are ‘ringfenced’. This means we can only pay for spending on three waters with the income we directly receive from ratepayers and other sources. Historically we have funded three waters through a mix of targeted rates and general rates, but the in future this ‘top up’ from general rates cannot occur. Our water charges must therefore increase to offset this.

Essentially, we need to increase rates now so that we can meet the government’s expectations for an appropriate level of investment that meets all renewal, growth, level of service, and regulatory requirements over the next 30-years.

How can you find out more and have your say?

This is one of the most significant changes to water services in a generation – please take the time to read through the information online and have your say.

Consultation document

Please read the below consultation document to understand the pros and cons of each option.

MDC Local Water Done Well Consultation Document [PDF]

Hard copies of this information is available at all MDC offices across the district.

Drop in Sessions

Come to a Public Drop-in Session to discuss the options with the MDC team.

  • Tuesday 13 May - Fairlie - 4.30pm - 6pm, Mackenzie Community Centre
  • Monday 19 May - Tekapo - 4.30pm - 6pm, Lake Tekapo Community Centre
  • Wednesday 21 May - Twizel - 4.30pm - 6pm, Twizel Events Centre
  • Thursday 22 May - Online - 4.30pm - 6pm (details TBC)

Survey

Click here to fill out the Local Water Done Well survey

Public consultation is open until 5pm, Friday 13 June

  • Mackenzie Local Water Done Well Survey

    The reform of how water services are delivered is one of the most significant decisions Council will make. 

    With the help of the community, Council must decide which service delivery model will be used to deliver water services to you in the future. 

    We are presenting two options for community consideration: 

    1. In-house delivery of water services. 
    2. Joining a new council controlled water services organisation with other councils.

    Click here to read the Local Water Done Well consultation document.

    We are looking for community feedback on these two options, to help inform our Council and guide decisionmaking.

    Submissions close 5.00 pm, 13 June 2025

    Please note that responses will be made publicly available, where possible any identifying information will be redacted. 

    Take Survey
Page last updated: 09 May 2025, 04:07 PM