Council prepares for new era of water services provision

Waikato District Council will start planning for a new era in water services provision beyond June 2026 after Watercare confirmed this week its withdrawal from a contract to operate the district’s water, wastewater and stormwater services.

Council’s contract with Watercare will come to an end on 30 June 2026 after the company cited a need to change its focus under the government’s “Local Water Done Well” programme.

Despite this change, council will continue to deliver three waters services to the community once the contract ends.

Watercare began operating Waikato district’s water, wastewater and stormwater services in October 2019.

While Council continues to own all assets, Watercare manages the water, wastewater and stormwater infrastructure above and below ground under the oversight of an independent body, the Waters Governance Board, which reports to the Council.

Council’s relationship with Watercare started more than a decade ago as the company has been treating Tuakau and Pookeno’s water and wastewater since 2010. This part of the relationship will continue beyond June 2026.

Waikato District Council Chief Executive Gavin Ion says the Council is disappointed the district-wide contract will end in 2026 but it understands Watercare’s position.

“The contract has delivered benefits for the community in terms of improvements in service levels, delivery of capital projects, innovation and new ideas, sharper procurement and affordability within a context of significantly increasing costs and standards,” he says.

“The combination of our local knowledge and Watercare’s expertise has worked well and the arrangement has provided learnings and information which will be used to take both organisations forward.”

The news comes in the same week that Waikato District Council has decided to switch from a Long-Term Plan (LTP) process to an enhanced Annual Plan for 2024-25.

Under the Government’s Water Service Act’s Repeal Act, Council will need to implement “Local Water Done Well” in a two-stage approach.

The initial bill, to be passed by mid-2024, establishes the framework and transitional arrangements for the new water services system.

A second bill will provide for the long-term replacement regime and will be introduced in December 2024, and enacted by mid-2025.  

To assist councils to include water services in their LTPs, one option in the Government’s legislation is for councils to defer their LTP by 12 months and prepare an 'enhanced annual plan’ for the 2024/25 financial year.

The LTP would then become a nine-year plan running from 2025 to 2034. 

“Uncertainty in the waters area, including legislation still to come, is one of the reasons for this decision.

“The future of our relationship with Watercare is just one of those uncertainties that provide reason to defer our LTP until 2025,” says Ion.

Council will now start the process of determining the future of water services provision in the district beyond June 2026.

The Local Government Act requires councils to undertake a review of any services they deliver within two years of a significant contract ending. 

This is to ensure that they are delivered in a cost-effective way which meets the community needs for good quality infrastructure.

This review will consider options to deliver water services in the future and will assist in decision making as Council transitions out of the Watercare contract.

Potential options for water service delivery post-June 2026 may include:

• In-house delivery
• Delivery by a Council Controlled Organisation (CCO), whether wholly or partly-owned by the Council
• Delivery by another local authority
• Another person or agency (for example central government, a private sector organisation or community group).