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Local Government (Water Services) Act 2025

Schedule 2: Contents of transfer agreements

You could also call this:

"What's included in an agreement to transfer water services to a new organisation"

Illustration for Local Government (Water Services) Act 2025

When a territorial authority and a water organisation make a transfer agreement, they must include certain information. You need to know who is involved, what the agreement is for, and when it starts. The agreement must also say what area the water organisation will provide services to.

The agreement must describe what responsibilities and assets are being transferred. This includes things like water pipes and treatment plants. It must also say what liabilities, like debts, are being transferred. If the agreement is about stormwater services, it must include information about stormwater zones and who is responsible for them.

The agreement must also say how the territorial authority and the water organisation will work together on things like building consents and land use planning. It must include details about how charges, like rates and fees, will be collected and who will be responsible for making decisions about spending and revenue. You can find more information about this in the Building Act 2004 and the Local Government Act 2002. The agreement must also follow the rules set out in section 86 and clause 3.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1005048.

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2Contents of transfer agreements Empowered by ss 12, 15

1Parties, purpose, dates, and scope of agreement

  1. A transfer agreement must—

  2. name the parties; and
    1. state the purpose of the agreement, including the section of this Act that requires or permits the agreement to be entered into; and
      1. specify the geographical boundaries of the service area in which the water organisation will provide water services under the agreement; and
        1. specify—
          1. the date on which the agreement is entered into; and
            1. the date on which the agreement is to take effect.

            2Matters transferred: general

            1. A transfer agreement must describe the general nature of—

            2. the responsibilities for providing water services being transferred; and
              1. any water services infrastructure and any other assets being transferred.

                3Matters transferred: specifics

                1. A transfer agreement must specify in detail all matters being transferred in relation to the relevant water services, including the following:

                2. statutory responsibilities, functions, duties, and powers concerning providing water services:
                  1. ownership of water services infrastructure and any other assets:
                    1. liabilities:
                      1. responsibilities for managing the water services:
                        1. responsibilities for operating the water services:
                          1. if the transfer agreement relates to providing stormwater services,—
                            1. a current and accurate description of any stormwater service zones in the service area; and
                              1. the responsibilities relating to stormwater service zones (if applicable):
                              2. resource consents and associated rights and functions (for example, the right to apply for renewal of a consent and the functions of monitoring and reporting on compliance with a consent):
                                1. contracts, including service agreements between the territorial authority and any other person.

                                  1. For the purposes of subclause (1)(c), the transfer agreement must include additional information relating to any liabilities, including the following:

                                  2. the liabilities that relate to each water service:
                                    1. any liabilities that are not specifically related to a particular water service:
                                      1. an explanation of why a liability identified under paragraph (b) is being transferred under the agreement.

                                        4Matters not transferred

                                        1. A transfer agreement must specify all matters referred to in clause 3 that relate to water services and are not being transferred, including details about—

                                        2. water services infrastructure and any other assets that will continue to be owned by the territorial authority; and
                                          1. what is required of the water organisation in relation to—
                                            1. managing the water services infrastructure and other assets; and
                                              1. operating and using the water services infrastructure and other assets; and
                                              2. any statutory responsibilities, functions, duties, and powers relating to providing water services that will be retained, and will continue to be performed and exercised, by the territorial authority.

                                                5Matters of shared interest

                                                1. A transfer agreement must specify in detail arrangements to be put in place between the parties to ensure that matters of shared interest are managed effectively and efficiently.

                                                2. Those matters include how the parties to the agreement will work together in relation to—

                                                3. when the territorial authority is performing and exercising its functions, duties, and powers under the Building Act 2004; and
                                                  1. land use planning and resource management planning (including consent processes); and
                                                    1. the performance or exercise of any other statutory functions, duties, and powers of the parties that are relevant to both parties (for example, emergency management).

                                                      6Collection of charges, etc

                                                      1. A transfer agreement must set out arrangements to be put in place for charging and revenue collection for the water services that are being transferred, including—

                                                      2. whether rates, fees, and other charges will be collected by the territorial authority or the water organisation; and
                                                        1. if the territorial authority will continue to collect any rates, fees, and other charges,—
                                                          1. how and when the territorial authority will pass revenue collected on to the water organisation (including details about transitional arrangements and the duration of those arrangements); and
                                                            1. any associated fees and expenses that will be charged and retained by the territorial authority; and
                                                              1. a confirmation that the territorial authority will provide the water organisation with sufficient revenue each financial year to enable the organisation—
                                                                1. to undertake the capital and operating investment programme in the organisation’s water services strategy for that year; and
                                                                  1. to comply with all relevant regulatory requirements; and
                                                                    1. to be financially sustainable.

                                                                  2. However, subclause (1)(b)(iii) does not apply if the territorial authority is collecting the rates, fees, and other charges as an agent of the water organisation.

                                                                  3. If a territorial authority collects rates, fees, or other charges other than as an agent of a water organisation, the authority—

                                                                  4. does so under the LGA 2002 and the Local Government (Rating) Act 2002; and
                                                                    1. must include information relating to the rates, fees, or other charges in relevant documents prepared under Part 6 of the LGA 2002.

                                                                      1. In this clause, agent of the water organisation, in relation to the capacity in which a territorial authority collects rates, fees, or other charges,—

                                                                      2. means—
                                                                        1. the transfer agreement provides that the territorial authority will collect the rates, fees, and other charges as an agent for the water organisation; and
                                                                          1. the water organisation is responsible for—
                                                                            1. setting charges under section 86; and
                                                                              1. determining the amount of revenue to be collected and the nature of charges imposed under this Act; but
                                                                            2. does not include a territorial authority collecting rates, fees, and other charges when the territorial authority is responsible for—
                                                                              1. setting those rates, fees, and other charges; or
                                                                                1. determining the amount of revenue and the nature of those rates, fees, and other charges to be imposed.

                                                                                7Responsible decision makers for revenue and charging

                                                                                1. A transfer agreement must specify whether the territorial authority or the board of the water organisation will be responsible for making final decisions about the following matters:

                                                                                2. the water organisation’s capital expenditure and operating expenditure for the water services it provides:
                                                                                  1. the water organisation’s level of charges and revenue recovery for the water services.

                                                                                    1. If a transfer agreement specifies that the territorial authority will be responsible for making any final decision described in subclause (1), the practical implications of that approach must be explained in the transfer agreement or the water organisation’s foundation documents, including—

                                                                                    2. the implications for the territorial authority and the water organisation; and
                                                                                      1. the implications for the process of preparing the water organisation’s water services strategy and water services annual budget; and
                                                                                        1. how the territorial authority will notify the water organisation of its final decision; and
                                                                                          1. how the territorial authority will ensure that its process for making the final decision is transparent to its communities.

                                                                                            8Other information in agreement

                                                                                            1. A transfer agreement must provide for all other matters, and contain all other information, that the territorial authority considers appropriate.