Our Water Done Well

Our water done well in the Queenstown Lakes District

We’re proposing a change to how water supply, wastewater, and stormwater services are delivered in the future.

Queenstown Lakes District Council (QLDC) is consulting on a proposed model for future delivery of water services in the district, as part of central government’s Local Water Done Well legislation.

Local Water Done Well is the current government’s plan to address Aotearoa New Zealand’s water infrastructure challenges, and aims to deliver a future water services system that emphasises balance between economic, environmental, and water quality outcomes, while enabling local communities and councils to determine how these services are delivered.

As part of this reform, councils are required to consider, and consult with their community, on at least two arrangements for the future delivery of water services - one of which must be our existing approach.

Background

The Local Government (Water Services Preliminary Arrangements) Act 2024 (WSPA Act) is the first legislation to support Local Water Done Well and was enacted in September 2024. The WSPA Act sets out several transitional provisions, including a requirement for all councils to prepare and submit a Water Services Delivery Plan (WSDP) to the Government. A WSDP must describe the current state of water assets and services and identify the future arrangements for delivery of water services and how financial sustainability of water services will be achieved.

The WSPA Act provides an opportunity for councils to review current arrangements and to consider whether there are better alternatives to provide sustainable and efficient water services, addressing current challenges and laying the foundation for future improvements.

Further legislation supporting the Government’s reforms is currently progressing and will introduce new planning and accountability requirements and a new regulatory regime. The proposed regulatory regime, together with the existing legislative requirements, will set a baseline level of performance regardless of the delivery model chosen. Our assessment of the options available to QLDC for its future delivery of water services has considered how each option may be impacted by the new legislation, and sought to identify which option would perform better in new regulated environment.

What we’re proposing

As required by the WSPA Act, QLDC has identified the following potential future water services delivery models for the Queenstown Lakes District:

1. Establish a Water Services Council Controlled Organisation (WSCCO) owned by QLDC to deliver water services (our proposal).
2. Continue to deliver water services in-house.

A WSCCO is a Council Controlled Organisation specifically established to manage and deliver drinking water, wastewater, and stormwater services. A WSCCO established under the new water legislation will have a bespoke set of oversight and accountability requirements, which reflects the intention of the reforms to provide more transparent information about water service delivery planning and financing.

The proposed WSCCO would be fully owned by QLDC, but the organisation would be governed by its own independent specialist board and management. QLDC would be the only shareholder and would appoint board members based on the skills and experience needed for proper governance of the new organisation. The developing legislation, through the LGWS Bill, will prevent a WSCCO from being privatised which means that the WSCCO will remain wholly owned by QLDC.

The WSCCO would be responsible for delivery of all water services and would own QLDC’s current water assets and associated debt and liabilities. As these are currently strategic assets of QLDC, the transfer of these assets to the WSCCO would need to be provided for in QLDC’s Long-Term Plan. The WSPA Act allows QLDC to amend its Long-term Plan without undertaking a full Long-term Plan amendment process, on the basis that this consultation will also cover the transfer of water services (strategic) assets.

By setting up a WSCCO, the Council has the greatest opportunity to deliver high quality, resilient, sustainable, and reliable water services and provide certainty for our communities on the provision of these services.

Why we’re proposing a WSCCO

A Water Services Council Controlled Organisation offers an approach that introduces independent expert governance to exclusively prioritise and deliver water services in the best interests of the Queenstown Lakes District and free from political influence, and all while meeting regulatory requirements.

Minimising the cost to households for water services in the long term has been an essential part of QLDC’s assessment of the different models available, given costs are already projected to increase significantly as outlined in the Long Term Plan 2024-2034. Other considerations included a solution’s ability to attract and retain the best staff, adapt to changing requirements without disruption, provide for effective and efficient management and delivery of water services, maximise public value and minimise waste, and enable community interests and priorities.

With the proposed WSCCO model, we estimate household charges for water to be, on average, 5.2% higher in the short-term (2024-2034) compared with an in-house model, but 10.1% lower on average in the long-term (2034-2044) compared with that same in-house model.

WSCCOs have different borrowing requirements from the Local Government Funding Agency (LGFA), which would require higher water charges initially to deliver the same services and capital projects QLDC currently has planned. This does mean the WSCCO would generate more revenue in the short-term, repaying debt faster and leaving the WSCCO with an estimated $37 million less debt than the in-house model by 2034.

With less debt and less costs associated with interest on borrowing, household water charges with a WSCCO are estimated to drop below the in-house model.

Key documents

Before you share your feedback, please carefully read the below documents:

• QLDC Your Water Done Well Consultation Document
• QLDC Your Water Done Well Summary of Proposal
• Longlist Assessment
• Option Assessment
• WSCCO Oversight and Governance Requirements
• Financial Modelling Assumptions
• Assessment Results
• Additional Testing Results

Ensure our water’s done well and have your say

We would like to know:

• If you support our proposal to establish a Water Services Council Controlled Organisation for the management and delivery of wastewater, drinking water and stormwater services (Option 1).
• If you prefer that we retain water services in-house (Option 2), albeit recognising that changes would need to be made to the way we operate to enable us to respond to the new regulatory environment.
• Any other comments you may have on our proposal to establish a WSCCO outlined in the consultation document.

Feedback can be shared from Monday 2 June in any of the following ways:

• Online: Using the feedback form available below.
• By post: Sent to Queenstown Lakes District Council, Private Bag 50072, Queenstown 9348, Freepost 191078, Attention: Our Water Done Well.
• By email: Sent to letstalk@qldc.govt.nz, subject line: Our Water Done Well.

Copies of the detailed consultation document (statement of proposal) will be available at no cost from either of the Council offices at 10 Gorge Road, Queenstown, 47 Ardmore Street, Wānaka, or any public library.

Feedback must be received digitally or in writing by Sunday 29 June 2025.

Next steps

The Council intends to make decisions about the proposal in a Council meeting on Thursday 31 July 2025. This meeting will be open to the public.

We then need to prepare and submit a Water Services Delivery Plan (WSDP) to Department of Internal Affairs (DIA) by Wednesday 3 September, describing the current state of our water assets and services as well as the future arrangements for delivery of water services.