Agenda of Extraordinary Council Meeting

2 April 2025

5.1 Public consultation on the draft version of the local water done well consultation document

File Number: A5142938

Author: Margriet Veenstra, Manager - Property Information & Business Compliance

Authoriser: Charlie Billington, Group Manager - Corporate Services

Take Pūrongo / Purpose of the Report

To seek approval from Council to undertake public consultation for Local Water Done Well (LWDW) as required under the Local Government (Water Services) Bill, between 3 April 2025 and 4 May 2025 on the draft Local Water Done Well consultation document.

WhakarĀpopoto matua / Executive Summary

· Following the 2023 general election, the new government replaced the Three Waters Reform with the LWDW framework.

· The LWDW framework was developed to provide councils with greater autonomy while ensuring regulatory compliance and sustainable water service management.

· Workshops were held with Councillors in December, February and March to discuss water service delivery options (WSDO), legislation and asset management planning, and share updated financial modelling.

· Council must now determine their preferred governance and WSDO through public consultation before implementing any changes.

· Section 28 of the Act mandates that councils must consult with their communities on the proposed delivery models.

· The consultation document outlines key considerations, including governance models, financial implications, and WSDOs identified by Council at the 13 March 2025 Council Meeting.

· The consultation process will provide an opportunity for the community to have their say on the future of local water service delivery, ensuring that Council can make informed decisions incorporating public feedback.

tŪtohunga / Recommendation

That Council approve:

a) the draft Local Water Done Well consultation document, detailed in attachment 1 for public consultation to take place between 3 April 2025 and 4 May 2025, and

b) any grammatical, graphical or other minor corrections to the draft Consultation Document and/or supporting information may be approved in writing by either the Chief Executive or Mayor, prior to publication of the draft on 3 April 2025.

1) TĀhuhu kŌrero / Background

The Government’s LWDW reform programme replaces the former Three Waters legislation and provides a new framework for how councils plan, fund, and deliver drinking water, wastewater, and stormwater services.

The framework enables councils to retain local ownership and control of water services, while ensuring delivery models meet strengthened national requirements. Councils can continue to manage services in-house, form standalone or joint water service providers (e.g. council-controlled organisations).

Key features of the framework include:

· Structural Flexibility: Councils can choose from several service delivery models, including retaining water services in-house or establishing a new water service provider independently or in partnership with other councils.

· Financial Separation and Borrowing Capacity: Water service providers must be financially separate from general council operations. The Local Government Funding Agency (LGFA) will lend to eligible water providers with support from parent councils. Water CCOs can borrow up to 500% of their water-related revenue, while council borrowing limits remain capped at 280% of total revenue (under current LGFA rules).

· Public Ownership: Water service providers must remain publicly owned.

· Economic Regulation: The Commerce Commission will regulate the financial performance of water service providers, including monitoring whether charges are reasonable, and revenue is sufficient to support required investment.

· Drinking Water Oversight: Taumata Arowai remains the national water regulator for drinking water safety.

· Minimum Requirements: All water service providers must meet new minimum requirements under the Water Services Entities Amendment Act 2024, including:

o Financial sustainability.

o Regulatory compliance.

o Transparent and ring-fenced funding.

o Asset management and investment planning.

o Public reporting and performance monitoring.

o Strong iwi/Māori and community engagement.

These reforms will take full effect once final legislation is passed. Councils must develop a 10-year Water Services Delivery Plan by 3 September 2025 that outlines how their chosen model will meet these requirements.

2) matapaki me NgĀ KŌwhiringa / Discussion and Options

Consultation

Section 28 of the Act mandates that councils must consult with their communities on the proposed delivery models. This consultation ensures that the community's views are considered in decisions that will impact public health, environmental sustainability, and economic development.

The consultation process must include making relevant information publicly available, such as the proposed model or arrangements for delivering water services, an analysis of at least two options (including the proposed arrangements/model), and potential impacts of proceeding or not proceeding with the proposal, including on rates, debt, levels of service, and any charges for water services.

Engaging in this consultation process is vital for councils to ensure that decisions regarding water service delivery are transparent, well-informed, and reflective of the community's needs and preferences.

A proposed Local Water Done Well (LWDW) engagement plan has been created and attached to this report (attachment 3).

Discussion of options

The Local Water Done Well consultation document can be found in attachment 1. As per resolution 2025/17 and 2025/18, council will consult on two delivery options:

1. Internal business unit (“status quo”) (preferred)

2. Multi-Council CCO water organisation.

Council directed the Chief Executive Officer to prepare a Statement of Intent (SOI) by 31 March 2025 to enter into a Heads of Agreement with Whangarei District Council (WDC) and Kaipara District Council (KDC) for the potential future formation of a Multi-Council CCO water Organisation. A copy of the SOI is attached (attachment 2).

Option 1: Council approve the draft Local Water Done Well consultation document, detailed in attachment 1 for public consultation using the Special Consultative Procedure to take place between 3 April 2025 and 4 May 2025 (recommended).

Advantages

• Ensures that the public consultation proceeds as scheduled, allowing for timely community input and feedback.

• Proceeding with consultation between 3 April 2025 and 4 May 2025, will ensure that the Far North District Council’s consultation timeline is in alignment with Whangarei District Council (WDC) and Kaipara District Council (KDC).

• An Elected Member steering group can be formed to guide discussions for the potential future formation of a Multi-Council CCO water organisation can commence with WDC and KDC, avoiding delays in decision-making and implementation, as the three Councils are aligned in their stage and timing of decision making.

Disadvantages

• If the public does not fully understand the options as outlined in the consultation document, the feedback may be less useful or misinterpreted, complicating the decision-making process.

Option 2: Council does not approve the draft Local Water Done Well consultation document, detailed in attachment 1 for public consultation using the Special Consultative Procedure to take place 3 April 2025 and 4 May 2025.

Advantages

• Allows additional time for further review of the consultation document.

Disadvantages

• Defers the opportunity to gather insights and feedback from the community between 3 April 2025 and 4 May 2025.

• Failing to consult between 3 April 2025 and 4 May 2025will misalign the Far North District Council with Whangarei and Kaipara District Councils. This may complicate discussions on forming a Multi-Council CCO water organisation due Councils differing stages in their decision-making processes.

TAKE TŪTOHUNGA / REASON FOR THE RECOMMENDATION

Public engagement is a legal requirement under section 28 of the Local Government (Water Services) Bill. Elected Members have been involved in several workshops that have contributed to the refinement of the consultation document. Proceeding with consultation between 7 April 2025 and 2 May 2025, will ensure that the Far North District Council’s consultation timeline is in alignment with Whangarei District Council (WDC) and Kaipara District Council (KDC). An Elected Member steering group can be formed to guide discussions for the potential future formation of a Multi-Council CCO water organisation can commence with WDC and KDC, avoiding delays in decision-making and implementation, as the three Councils are aligned in their stage and timing of decision making.

3) PĀnga PŪtea me ngĀ wĀhanga tahua / Financial Implications and Budgetary Provision

Please refer to the Consultation Document (CD) (attachment 1) and the Statement of Intent (SOI) (attachment 2) for financial details. Further information will also be made available on the FNDC website.

Āpitihanga / Attachments

1. Layout LWDW CD draft 4 14032025 1 - A5143376 ⇩

2. LWDW Statement of Intent - A5143094 ⇩

3. LWDW Engagement Plan - A5142996 ⇩

Hōtaka Take Ōkawa / Compliance Schedule:

Full consideration has been given to the provisions of the Local Government Act 2002 S77 in relation to decision making, in particular:

1. A Local authority must, in the course of the decision-making process,

a) Seek to identify all reasonably practicable options for the achievement of the objective of a decision; and

b) Assess the options in terms of their advantages and disadvantages; and

c) If any of the options identified under paragraph (a) involves a significant decision in relation to land or a body of water, take into account the relationship of Māori and their culture and traditions with their ancestral land, water sites, waahi tapu, valued flora and fauna and other taonga.

2. This section is subject to Section 79 - Compliance with procedures in relation to decisions.

He Take Ōkawa / Compliance Requirement	Aromatawai Kaimahi / Staff Assessment
State the level of significance (high or low) of the issue or proposal as determined by the Council’s Significance and Engagement Policy	High significance in accordance with our Significance and Engagement Policy
State the relevant Council policies (external or internal), legislation, and/or community outcomes (as stated in the LTP) that relate to this decision.	Local Government (Water Services) Bill Local Government (Water Services Preliminary Arrangements) Act 2024 Water Services Acts Repeal Act Water Services Entities Act 2022. (repealed) Water Services Legislation Act 2023. (repealed) Water Services Economic Efficiency and Consumer Protection Act 2023. (repealed)
State whether this issue or proposal has a District wide relevance and, if not, the ways in which the appropriate Community Board’s views have been sought.	The proposal has District wide relevance
State the possible implications for Māori and how Māori have been provided with an opportunity to contribute to decision making if this decision is significant and relates to land and/or any body of water. State the possible implications and how this report aligns with Te Tiriti o Waitangi / The Treaty of Waitangi.	There are wide reaching implications for Māori, whenua Māori, awa and moana. Contact will be made with Te Kahu o Taonui before public consultation commences to help ensure awareness is filtered to hapū.
Identify persons likely to be affected by or have an interest in the matter, and how you have given consideration to their views or preferences (for example – youth, the aged and those with disabilities).	As this a district wide service, there will be a wide-ranging number of people & groups who will be affected and their views will be considered as part of the consultation process
State the financial implications and where budgetary provisions have been made to support this decision.	Please refer to the Consultation Document (CD) (attachment 1) and the Statement of Intent (SOI) (attachment 2) for financial details. Further information will also be made available on the FNDC website.
Chief Financial Officer review.	This report was not reviewed by the CFO, although the Consultation Document was reviewed by the CFO.