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Local Government (Water Services) Act 2025

Schedule 3: Contents of water services strategy

You could also call this:

"What's in a Water Services Plan: A 10-Year Plan for Your Local Water Services"

Illustration for Local Government (Water Services) Act 2025

A water services strategy is a plan that water service providers must make. You will find information about the water services they provide in this plan. The plan must include what the provider wants to achieve and how they plan to do it.

The strategy must cover at least 10 years and include information about the provider's priorities and objectives. It must also explain how the provider will manage its water services and meet the needs of its consumers. You can find more details about this in section 234 and Part 4 of the Act.

The plan must also include financial information, such as how the provider will fund its activities and what prices it will charge consumers. Water organisations must include additional information, such as their policy on borrowing and investing. The strategy must be updated regularly to reflect any changes in the provider's plans or circumstances. More information about what the strategy must include can be found in clause 5 and clause 7.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1005067.

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3Contents of water services strategy Empowered by s 234

1Groups of water services activities

  1. A water services strategy must, in relation to each group of water services activities of a water service provider, identify—

  2. the water services activities within the group of water services activities; and
    1. the outcomes that the water service provider expects to achieve by providing the group of water services activities, including,—
      1. in the case of a water service provider that is a territorial authority, any community outcomes that are relevant to providing water services; and
        1. in the case of a water organisation, the outcomes that the organisation’s shareholders expect the organisation to achieve, as specified in the organisation’s statement of expectations.

        2Water services strategy: strategic matters

        1. A water services strategy for a water service provider must include the following information:

        2. the strategic priorities of the water service provider:
          1. the objectives, outcomes, and expectations that apply to the water service provider, including—
            1. the objectives specified in section 17; and
              1. in the case of a water organisation, any outcomes or expectations specified in the organisation’s statement of expectations:
              2. an overview of regulatory requirements:
                1. an explanation of how the water service provider intends to achieve or meet—
                  1. the strategic priorities included under paragraph (a); and
                    1. the objectives, outcomes, and expectations included under paragraph (b) (which must include how the water service provider intends to achieve the objective of managing and providing water services in a financially sustainable manner); and
                      1. regulatory requirements included under paragraph (c):
                      2. in the case of a water organisation, the measures and targets by which the water organisation’s shareholders can assess the water organisation’s performance in relation to its objectives and outcomes:
                        1. factors that the water service provider expects will have a significant impact on the provider, including the following:
                          1. any expected changes to the population in the water service provider’s service area:
                            1. any expected changes to the use of land in the water service provider’s service area:
                              1. the expected capital and operating costs required to address the expected changes specified under subparagraphs (i) and (ii):
                                1. any expected investment needed to meet objectives relating to housing growth and urban development:
                                  1. any other significant issues affecting the water service provider’s ability to maintain existing levels of service to consumers and to meet additional demands for water services:
                                  2. information relating to a territorial authority’s resource management planning and land use planning in the water service provider’s service area, including, in the case of a water organisation, how the organisation intends to respond to any relevant requirements that are included in the organisation’s statement of expectations:
                                    1. a description of any stormwater service zones in the provider’s service area and of any proposals to change them.

                                      1. The information required by subclause (1) must cover the period of at least 10 consecutive financial years to which the water services strategy relates (but not individually for each financial year), or such other period as is specified in this schedule or in Part 4 of this Act.

                                      2. A water services strategy must also, for a period of at least 30 consecutive financial years, identify—

                                      3. any expected significant water infrastructure issues for the provider over that period; and
                                        1. the principal options for managing any issues under paragraph (a); and
                                          1. the implications of the options under paragraph (b).

                                            3Water services strategy: operational matters

                                            1. A water services strategy for a water service provider must include the following information for each group of water services activities for which the water service provider is responsible:

                                            2. the nature and scope of the main water services activities the water service provider proposes to undertake:
                                              1. any significant work the water service provider proposes to undertake relating to the water services activities included under paragraph (a):
                                                1. a statement of the provider’s intended levels of service provision, which must include—
                                                  1. the performance measures that apply to the group of water services activities, including as applicable—
                                                    1. the measures that the water service provider considers will enable the public to assess the level of service for major aspects of the group of water services activities; and
                                                      1. any intended levels of service that the water service provider is required to publicly disclose in a water services strategy in accordance with a section 52P determination under the Commerce Act 1986; and
                                                        1. if no similar requirements have been set under subsubparagraph (B), any performance measures specified in a rule made under section 261B of the LGA 2002 that are relevant to a group of water services activities; and
                                                        2. the performance targets for each performance measure under subparagraph (i); and
                                                          1. any relevant quality standards or performance requirements in a section 52P determination under the Commerce Act 1986; and
                                                            1. any intended changes to the level of service that the provider provided in the financial year before the first financial year covered by the water services strategy and the reasons for the changes; and
                                                              1. the reasons for any material change to the cost of water services.

                                                              2. The information required by subclause (1) must be provided—

                                                              3. in detail for each of the first 3 financial years covered by the strategy; and
                                                                1. in outline for each of the subsequent financial years covered by the strategy.

                                                                  4Water services strategy: consumer feedback

                                                                  1. A water services strategy for a water service provider must include information about how the water service provider proposes to obtain feedback from consumers in relation to the water services that the water service provider provides to them.

                                                                  5Water services strategy: financial matters

                                                                  1. A water services strategy for a water service provider must include, for each year to which the strategy relates,—

                                                                  2. if the water service provider is a territorial authority, a complete set of forecast financial statements for the provider that is prepared as if the territorial authority were a separate water service provider; or
                                                                    1. if the water service provider is a water organisation, a complete set of forecast financial statements for the water service provider.

                                                                      1. A water services strategy must include the following information for each group of water services activities for which the water service provider is responsible:

                                                                      2. the water service provider’s intended approach to funding, revenue, and pricing, which must include detailed information on the following for the first 3 financial years to which the water services strategy relates:
                                                                        1. the water service provider’s intended approach to pricing the water services it provides; and
                                                                          1. the water service provider’s intended approach to charging consumers; and
                                                                            1. the water service provider’s intended sources of funding and revenue:
                                                                            2. the amount of capital expenditure and operating expenditure that the provider has budgeted, in each financial year to which the water services strategy relates, for the purposes of—
                                                                              1. improving the level of service; and
                                                                                1. meeting additional demand for the group of water services activities; and
                                                                                  1. replacing existing assets in the water services infrastructure:
                                                                                  2. the forecast financial statements that were prepared for the financial year immediately before the first financial year to which the strategy relates:
                                                                                    1. each of the following statements for each financial year to which the water services strategy relates:
                                                                                      1. a forecast statement of comprehensive revenue and expenses:
                                                                                        1. a forecast statement of cash flow:
                                                                                          1. a forecast statement of financial position:
                                                                                          2. a funding impact statement for each financial year to which the water services strategy relates:
                                                                                            1. any other information required by the Commerce Commission (see section 234).

                                                                                              1. A water service provider’s intended approach to funding, revenue, and pricing under subclause (2)(a) must be consistent with any requirements set by the Commerce Commission under Part 4 of the Commerce Act 1986.

                                                                                              2. The information provided under subclause (2)(a)(i) and (ii) must be accompanied by—

                                                                                              3. the water service provider’s intended schedule of prices and charges; and
                                                                                                1. the methodologies that support the provider’s prices and charges.

                                                                                                  1. For the purposes of subclause (2)(a)(iii), the information relating to the intended sources of funding and revenue must include—

                                                                                                  2. the reasons for selecting each intended source of funding and revenue; and
                                                                                                    1. an indication of the amount or level of funding or revenue expected from each intended source; and
                                                                                                      1. an explanation of the intended funding mechanism for each intended source; and
                                                                                                        1. the reasons for selecting each intended funding mechanism.

                                                                                                          1. For the purposes of subclause (2)(b), if capital expenditure is budgeted for 2 or all of the purposes in that paragraph, the expenditure may be treated as if it were budgeted solely in relation to the primary purpose of the expenditure.

                                                                                                          2. For the purposes of subclause (2)(c), the previous year’s financial statements must be presented in a way that allows the public to compare the financial statements with the forecast financial statements for each of the financial years covered by the strategy.

                                                                                                          3. However, a water services strategy need not include the following:

                                                                                                          4. the financial statements required under subclause (2)(d) if it is the first water services strategy for the water service provider:
                                                                                                            1. each of the statements referred to in subclause (2)(d) if—
                                                                                                              1. the water service provider is a territorial authority that provides stormwater services but not wastewater services or water supply services; and
                                                                                                                1. the information in those statements is included in the set of forecast financial statements under subclause (1)(a).

                                                                                                                2. For the purposes of subclause (2)(e), a funding impact statement must—

                                                                                                                3. be in the prescribed form; and
                                                                                                                  1. identify—
                                                                                                                    1. the sources of funding to be used by the water service provider; and
                                                                                                                      1. the amount of funds expected to be produced from each source; and
                                                                                                                        1. how the funds are to be applied.

                                                                                                                        2. In addition to the requirements in subclause (9)(b), the prescribed form for a funding impact statement may require that the water services strategy includes information relating to 1 or more of the financial statements required under subclause (2)(d).

                                                                                                                        3. If the prescribed form for a funding impact statement does require the inclusion of the information described in subclause (10), that information need not also be included under subclause (2)(d).

                                                                                                                        6Water services strategy: additional matters for water organisations

                                                                                                                        1. This clause applies to a water services strategy prepared by a water organisation.

                                                                                                                        2. In addition to the information required under clause 5, the water services strategy must include—

                                                                                                                        3. the organisation’s policy on giving security for borrowing; and
                                                                                                                          1. the organisation’s objectives for holding and managing financial investments and equity securities; and
                                                                                                                            1. the organisation’s quantified targets for returns on financial investments and equity securities; and
                                                                                                                              1. if the water organisation decides to set separate water services charges for separately used or inhabited parts of a property under section 95, a definition of separately used or inhabited.

                                                                                                                                7Water services strategy: water services infrastructure

                                                                                                                                1. A water services strategy for a water service provider must outline the most likely scenario for managing the water service provider’s water services infrastructure assets over a period of at least 30 years and, in that context, must—

                                                                                                                                2. include estimates of the projected capital and operating expenditure associated with managing those assets—
                                                                                                                                  1. in each of the first 10 financial years covered by the strategy; and
                                                                                                                                    1. in each subsequent period of 5 financial years covered by the strategy; and
                                                                                                                                    2. identify, for each period described in paragraph (a),—
                                                                                                                                      1. any significant decisions about capital expenditure the provider expects it will be required to make; and
                                                                                                                                        1. when the provider expects it will be required to make those decisions; and
                                                                                                                                          1. for each decision, the principal options the provider expects it will have to consider; and
                                                                                                                                            1. the approximate scale or extent of the costs associated with each decision.

                                                                                                                                            8Water services strategy: additional information and requirements

                                                                                                                                            1. A water services strategy for a water service provider must, in relation to any forecast financial statements and financial estimates included in the strategy,—

                                                                                                                                            2. identify all the significant forecasting assumptions and risks underlying the financial estimates; and
                                                                                                                                              1. without limiting paragraph (a), identify the following assumptions on which the financial estimates are based:
                                                                                                                                                1. the water service provider’s assumptions concerning the life cycle of significant water services infrastructure assets; and
                                                                                                                                                  1. the water service provider’s assumptions concerning sources of funds for the future replacement of significant water services infrastructure assets; and
                                                                                                                                                    1. in relation to the scenario referred to in clause 7, the assumptions of the water service provider about—
                                                                                                                                                      1. growth or decline in the demand for relevant services:
                                                                                                                                                        1. increases or decreases in relevant levels of service; and
                                                                                                                                                      2. in any case where significant forecasting assumptions involve a high level of uncertainty,—
                                                                                                                                                        1. identify the nature of that uncertainty; and
                                                                                                                                                          1. include an outline of the potential effects of that uncertainty on the financial estimates provided.

                                                                                                                                                          9Water services strategy: additional information for water organisations

                                                                                                                                                          1. A water services strategy for a water organisation must include—

                                                                                                                                                          2. a summary of any comments provided by shareholders on a draft of the water services strategy (see section 236); and
                                                                                                                                                            1. an explanation of any significant changes that shareholders required the water organisation to make to the draft strategy; and
                                                                                                                                                              1. a statement as to whether shareholders approved the final water services strategy.