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Local Government (Water Services) Act 2025

Planning, reporting, and financial management - Financial matters

251: Financial management: water organisations

You could also call this:

"Water organisations must manage their money carefully to cover expenses and provide good services."

Illustration for Local Government (Water Services) Act 2025

You need to know how water organisations manage their money. A water organisation must make sure it has enough money coming in each year to cover its expenses. You can think of expenses like the cost of fixing pipes or paying staff. The organisation must plan carefully to have enough money.

Sometimes, a water organisation can decide to have less money coming in if it thinks that's a good idea. It must consider things like how much it costs to keep services running and how it will pay for maintaining its assets. Assets are things like pipes, pumps, and treatment plants that help provide water services.

A water organisation must also manage its money wisely, thinking about what's best for the people it serves now and in the future. It needs to make sure it has a good plan to cover its expenses, as outlined in its water services strategy. This section of the law does not change how Part 4 of the Commerce Act 1986 applies, which you can find at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM88433.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1004686.

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Part 4Planning, reporting, and financial management
Financial matters

251Financial management: water organisations

  1. A water organisation must ensure that each year’s projected operating revenues are set at a level sufficient to meet that year’s projected operating expenses.

  2. Despite subsection (1), a water organisation may set projected operating revenues at a different level from that required by subsection (1) if the organisation determines that it is financially prudent to do so, having regard to—

  3. the estimated expenses of achieving and maintaining the intended service levels set out in the organisation’s water services strategy, including the estimated expenses associated with maintaining the service capacity and integrity of assets throughout their useful life; and
    1. the projected revenue available to fund the estimated expenses associated with maintaining the service capacity and integrity of assets throughout their useful life; and
      1. the equitable allocation of responsibility for funding the provision and maintenance of assets and facilities throughout their useful life.

        1. A water organisation must manage its revenues, expenses, assets, liabilities, investments, and general financial dealings prudently and in a manner that promotes the current and future interests of the communities and consumers in its service area.

        2. A water organisation must make adequate and effective provision in its water services strategy to meet the organisation’s expenditure needs identified in that strategy.

        3. This section does not limit the application of Part 4 of the Commerce Act 1986.