18Financial principles for water service providers

1. A water service provider must act in accordance with the following financial principles:

2. the provider must spend the revenue it receives from, and funding it receives for, providing water services on the water services it provides (including on maintenance, improvements, infrastructure renewal, servicing debt relating to the services it provides, and providing for growth):
3. the provider must ensure that the revenue and funding it applies to providing water services is sufficient to sustain the provider’s long-term investment in its water services while meeting all regulatory requirements:
4. the provider’s revenue and funding (including from charges), expenses, and dividends (if applicable) must be transparent to the public:
5. the provider must be accountable for its revenue, funding, and expenses,—
   1. if it is a territorial authority, to its communities; or
   2. if it is a water organisation, to its shareholders.

6. A water service provider must demonstrate its compliance with the financial principles listed in subsection (1)—

7. in its financial operations and financial policies; and
8. in its planning and reporting documents prepared under Part 4 (listed in section 223(2)); and
9. if the provider is a territorial authority,—
   1. in any transfer agreement it enters into; and
   2. in documents relating to a proposal to establish a water organisation; and
10. if the provider is a local authority, in its financial strategy prepared and adopted under section 101A of the LGA 2002.

11. If a water service provider is a water organisation that is authorised by its shareholders to pay a dividend,—

12. the financial principle stated in subsection (1)(a) does not apply to the payment of the dividend; but
13. the organisation must not pay a dividend amount that could compromise its ability to act in accordance with the financial principle set out in subsection (1)(b).

14. Subsections (1) and (2) apply to the following water service providers jointly:

15. 2 or more water service providers that enter into a joint water service provider arrangement under section 26:
16. 2 or more water service providers that provide water services in accordance with a split decision-making model under subpart 12 of Part 4 of the Commerce Act 1986.