Option 1 - Our Water, Our Way
This option keeps water services in-house, under direct Council control. We’ll manage operations the same way we do now, but with modifications to financial reporting and planning.
Nationwide all councils must reconsider how they will deliver water services. This is part of the Government's Local Water Done Well to ensure water services meet regulatory requirements, support urban growth and development and are financially sustainable.
Councils will continue to own drinking water, wastewater and stormwater assets, but must decide on the service delivery model for the future.
We're proposing 2 options:
- Option 1, Our Water, Our Way
(Council-managed)
- Option 2, CCO (Council-Controlled Organisation)
We want to know your preferred option and views. It's important to have your say and help elected members decide the best way forward for delivering water services for Te Tairāwhiti from 2027 onwards.
We need a reliable, sustainable and affordable plan. The decision we make now will shape our water services for future generations.
Consultation is open until 5pm Thursday 1 May 2025.
- Share your feedback with us online, on the form below.
- Come chat to us and give us your thoughts in person. See the community hui calendar for dates and times.
Why we need to decide on the option now
By 3 September 2025 all councils must submit a Water Services Delivery Plan. The plan must include the delivery model, the current state of our water infrastructure, the level of investment and how we'll meet regulatory requirements and support growth and ensure financial sustainability.
Government wants more transparency around the cost of water services.
All councils are required to separate revenue and expenditure for water supply, wastewater and stormwater from other council activities by 1 July 2027.
We also need to submit our Water Services Delivery Plan by 3 September 2025 that includes the delivery option.
Under Local Water Done Well, Council will continue to own our drinking water, wastewater and stormwater assets, but we need to determine a delivery model that is sustainable, affordable and meets compliance requirements.
Every council must submit a Water Services Delivery Plan by 3 September 2025. These plans must outline:
- The current state of our drinking water, wastewater and stormwater systems.
- The level of investment required and how it will be funded.
- How we will meet regulatory requirements, support regional growth and ensure financial sustainability.
We’ve independently assessed the challenges for our water services and future needs for growth and resilience.
Then we completed an analysis of the various delivery models Government provided and potential cost of these models.
The models included delivering water services in-house with separate funding, establishing a separate water organisation, or establishing a joint arrangement with other councils.
Only 2 options are realistic for Tairāwhiti, taking into account what is most cost-effective for our community and practical in the timeframes, while still allowing us to retain control of our assets and ensure local accountability.
We’ve also engaged our iwi partners to weigh in on the options so that we ensure future water management is aligned with our Tiriti responsibilities and te ao Māori values.
Changing to the new model and separating the funding for water services from other Council operations must be in place by 1 July 2027.
How much different properties will pay in the future will depend on:
- The delivery model - Our Water, Our Way or a CCO
- The level of investment identified in our Water Service Delivery Plan.
- Consultation on revenue and financing in Council’s 2027 – 2037 Long Term Plan.
The Plan must show that the delivery of our water services can be financially sustainable, meaning there’s sufficient revenue from water services, investment set aside for future improvements and the ability to borrow money if needed.
While the level of investment in the plan is still being completed, we’ve estimated what the cost could be over time for Our Water, Our Way vs a CCO to replace old infrastructure, make upgrades and build resilience.
Costs will increase and move to user pays water metering, but in the short-medium term, charges to the average household doing Our Water, Our Way are lower than those from a CCO model by about $200 – 300.
In the long term, because costs are spread out over time, charges with a CCO could eventually become the same or slightly cheaper.
Most commercial and industrial properties already pay for drinking water based on their usage (via a water meter) and this won’t change. Like households, these properties will also see separate charges for wastewater and stormwater, and the same comparative difference in cost.
Differences in debt
Council has a maximum borrowing limit, much like a credit card limit. With the level of debt needed to invest in replacements and resilience, doing Our Water, Our Way, we'll still be able to borrow money and have enough room under the 280% debt cap for future borrowing or unexpected events like natural disasters.
A CCO will initially have slightly higher debt compared to Our Water, Our Way, due to the higher investment needed during the CCO’s startup. This affects the overall affordability of a CCO model in the early years.
It must also earn at least 10% of its debt, which means it needs to charge higher user fees in the beginning to meet this requirement. Council will need to provide financial backing, such as an underwriting or uncalled capital, to support the CCO’s financial stability.
However after the first 10 years, debt levels will be about the same for both and over the long term, debt under the CCO is expected to be lower than the in-house model.
Average household water charges over 10 years
The actual amount different properties will pay would be determined through consultation on our next Long Term Plan.
Total debt Our Water, Our Way vs CCO
Why option 1 is our preferred option
Our preferred choice is Option 1 - Our Water, Our Way. This model keeps control of water services under Council’s direct management. Every dollar set aside for water will be spent on water services—nothing else. This approach keeps decisions local and allows us to plan for the unique needs of our region with direct input from our community.
We have consistently invested in our critical water infrastructure, including $77m in upgrades to our wastewater treatment plant. We have a proven track record for providing safe drinking water – and we want to keep it that way.
With both options, replacements, planned improvements and resilience upgrades will go ahead. Also under both options we have to do more so there will be cost increases and a move to user pays.
The difference with a CCO is the initial higher set-up and operational costs, with the potential to complete projects faster.
We know affordability matters for our communities.
Our preferred option avoids the high set-up and transition costs associated with CCO, resulting in the lowest short-term impact on rates. It’s similar to what we have now and simpler to implement.
It maintains local control, ensures financial transparency and spreads the costs of gradual improvements over time, without front-loading or sudden increases in charges for ratepayers.
Borrowing capacity, capped at 280% of revenue, is sufficient for the region’s anticipated investment needs. As an in-house model, it offers the most predictable and stable financial approach.
This option also doesn’t lock us into one model forever, so we can adapt or change if another approach, like a joint arrangement with other councils or switching to a CCO if there’s a better opportunity in the future.
Our options
Doing nothing is not an option. After assessing 5 delivery models, we only have 2 options that are realistic for Tairāwhiti. This was taking into account what's most cost-effective for our community and practical in the timeframes, while still allowing us to retain control of our assets and ensure local accountability.
-
-
Option 2 - Single Council CCO
This option establishes a separate entity to manage drinking water and wastewater services, owned by Council but governed and operated independently, with its own CEO and board of directors.
Water services areas
The map shows properties in Gisborne city, Te Karaka and Whatatutu and rural connections to reticulated drinking water and/or wastewater and stormwater services.
Under both Option 1 and 2 - drinking water will be charged through direct user pays by water meter or targeted rates.
Currently some rural and most commercial and industrial properties are already paying for drinking water through water meter charges.
Feedback form
