Invercargill City Council chooses Three Waters services delivery model

Invercargill City Council has chosen to keep Three Waters Services in-house in the future.

At the Infrastructure and Projects Committee meeting on 13 May, elected members agreed to recommend establishing a Council Operated Enhanced Service to Council. The committee’s recommendation was accepted by elected members at a full Council meeting on Tuesday 27 May.

Infrastructure and Projects Committee chair, Councillor Grant Dermody, said the recommendation represented an important step in addressing the future needs of the city.

“How we deliver Three Waters services is a once-in-a-generation decision, and its impacts will span our entire community for many years to come,” he said.

The future of the city’s Three Waters services was one of the key issues outlined in tandem with Council’s Draft Annual Plan 2025/2026, which was open for public consultation between 13 March and 13 April.

The establishment of a Council Operated Enhanced Service was Council’s preferred option within the Draft Annual Plan 2025/2026. Council also consulted on two other options: establishing an Invercargill Council Controlled Organisation, and a Southland-wide Council Controlled Organisation.

The future of Three Waters attracted significant feedback from the community during public consultation, with 188 of 495 submissions in total providing some comment on the issue. Three-quarters of submitters on the future of water delivery services agreed with Council’s preferred option, to establish a Council Operated Enhanced Service, Dermody said.

Council had to consult on the issue as required by Central Government’s Local Water Done Well legislation. That legislation was introduced in a bid to ensure water services throughout Aotearoa New Zealand were both financially sustainable, and effectively managed, in the future.

The reforms included a raft of strict legislative changes to how water services are managed, including transitioning to operate similarly to independent utility businesses.

While Invercargill was in a better position than many other local authorities, having regularly maintained its Three Waters network and invested in associated infrastructure, maintaining the status quo was no longer viable, he said.

“Council must draw a line in the sand, to make sure that the future of Three Waters delivery within our community is practical and fit-for-purpose for future generations,” he said.

“As a Council, we believe the most important outcome is to provide an efficient, effective service that is the most practical for our community in the long-term. We also strongly believe in local decision-making. Together, these priorities mean that establishing a Council Operated Enhanced Service makes sense. This option gives us the best balance of providing the services our community needs.”

The Council Operated Enhanced Service represented the second-least cost option for water services delivery for ratepayers to 2034, and in the long-term was the lowest-cost option considered.

With this option, the average annual water services rate increase between 2027 and 2034 would be 6.26 percent, or $150 per household, Dermody said.

The Local Water Done Well reform required all councils in New Zealand submit their water services delivery plan to the Department of Internal Affairs by September this year.