Water

The following discussion on water considers:

• drinking water
• waste water
• storm water
• flood protection, and
• rural water infrastructure.

Overview

Background and history

Early settlers relied on wells, springs, streams and rainfall to supply their water needs. As towns grew, the local councils (or boards) and other entities initially assumed responsibility for providing a continuous supply, followed by a reticulated water supply direct to households and businesses. Over time, this has meant that local government now has the responsibility for supplying reticulated water to approximately 85% of people who are on such water systems.

As for drinking water, the disposal of wastewater in urban and built-up areas is primarily the responsibility of local authorities. Councils assumed this responsibility for similar public health, environmental and service delivery reasons. Management and asset planning considerations are also similar between the two types of networks, as are issues related to access to consistent information about the assets.

Water and water disposal systems represent key urban amenities that contribute to the health and wellbeing of the population in both rural and urban settings. In New Zealand, the regional variation in topography and water resource means that these systems are best managed locally.

Wastewater and many water systems are generally not interconnected across the country, although some areas may share treatment facilities. Each reticulated system has assets to collect untreated wastewater from customers and transport it to facilities for the treatment and disposal of wastewater effluent, which includes liquid, solids and gas.

Similarly, councils have responsibility for stormwater, drainage and flood protection systems, many of which started as individual systems under the control of separate boards or committees.

Institutional arrangements

For the most part, the management and operation of drinking water and wastewater systems remains under local government control. The following descriptions apply equally to drinking water as to wastewater and, to some extent, stormwater systems.

Many provincial and rural councils retain direct control over all aspects of their water networks. A number of larger councils use council-controlled organisations to deliver bulk and/or reticulated supplies to one (e.g. Metrowater) or more councils (e.g. Watercare Services, Capacity). Arrangements also exist for contracting out maintenance and operation.

The Papakura District Council is currently the only council in New Zealand to have fully contracted the management and operation of its water and wastewater networks to a private firm (United Water).[103]

Funding and pricing

Local authorities fund water network infrastructure from a variety of sources including rates (directly and indirectly), loans, subsidies (where available) and through development contributions. The latter are levied to cover the impact of increased demand on existing infrastructure. The graph below indicates that, of those territorial authorities using development contributions, a significant proportion of this revenue is used for drinking water, wastewater and stormwater.

Figure 41: Median development contribution charge by group of activities (top charges only)

Source: Department of Internal Affairs: Local Government Information Series 2008/01 - Analysis of 2007/08 Development Contributions

A potential issue is how the assets required for growth are funded. Analysis of Long-Term Council Community Plans[104] indicates that councils are looking to use more debt to fund capital expenditure.

Assets

One of the issues in relation to understanding water network assets is the availability of appropriate information. Though councils and their providers undertake asset management planning, there is no consistent mechanism to collect or analyse information on the scale of investment or state of these networks from a national perspective. The absence of such information is a potential risk to understanding future asset requirements and funding. Many of the figures given in this report are therefore based primarily on extrapolated values. As such, they represent best estimates from the information available.

Recent decisions made by the Government to help improve the transparency, accountability and financial management of/by local government will go some way to improving this situation.

The total value[105] of water, wastewater and stormwater assets under local government control is estimated to be approximately $33 billion. It is estimated[106] that local government also manages a further $1.5 billion worth of flood control and drainage assets. Across all councils, average annual capital expenditure on water networks is estimated to be around $1.15 billion per annum over the next 10 years. This is approximately 25% of the total forecast capital spend by councils over the same period.