Central Hawke’s Bay revises water costs from $7000 per home to $4890

Friday, 22 August 2025

Hear how Local Water Done Well tracking in last month before deadline

The Central Hawke’s Bay District Council has revised its projected water bills for households down from $7000 per year to $4890, after finding an error in its modelling.

The revised projected cost for the average household connection is a positive development for ratepayers in the rural district, however it remains $1600 higher than the $3200 the median household currently pays, and $1000 or more higher than estimated in many centres which have produced water service plans so far.

The council’s chief executive, Doug Tate, said an error in consulting firm PwC’s modelling had led to the $7000 figure. The new household water rates projected for the coming years would peak at $4890 per year, settling at $4660 for the average household by 2034.

This revised figure was also partly achieved by decreasing the rate of renewing water infrastructure, which was “going to mean probably increasing leaks across our network again”, and making big reductions to wastewater treatment plans, which mean “a much lower level of treatment”.

“We've got it down from the extremes of $7000 through the PwC error, rightly or wrongly, but more so through the deliberate work that we've done. But $4800 is still going to be significant challenge for many in our community,” Tate said.

“It's no different to what you're already hearing from many other small councils … that the Local Water Done Well framework doesn't address the long-standing financial unaffordability challenges that we face.

“It eases the burden, but it doesn't substantially address the long-standing historical unaffordability challenges that we've got.”

Councils are preparing water services delivery plans for September 3.

Central Hawke’s Bay Mayor Alex Walker last month wrote to Local Government Minister Simon Watts urging the Government to set a national definition for “affordable” access to water systems.

The Local Water Done Well regime, passed into law this week and requiring councils to produce water service delivery plans by September 3, instead focuses on “financial sustainability” over achieving lowest possible cost.

But to improve cost efficiencies the Government has been encouraging councils to work with their neighbours and create council-controlled regional water entities.

Central Hawke’s Bay is set to create a water entity with Napier and Hastings councils. Wairoa District Council, which previously committed to the regional entity, withdrew from the arrangement last month.

Tate said the joint water services plan would be agreed by the three councils on Thursday.

The planned joint model would not allow for cross-subsidisation across the councils, instead ring-fencing the revenue and spending of each. Such a scenario has been permitted under the Local Water Done Well.

Tate said there remained benefits to a regional council-controlled organisation (CCO) in this format, such as efficiency gains, more beneficial interest rates, and co-ordination of delivering services.

“Clearly the regional CCO, across all that modelling, the financial modelling and the non-financial work we did, definitely came out on top.”

Bay of Plenty water entity re-forms

Another fractured regional water grouping has reformed.

Tauranga City Council last week decided to work with Western Bay of Plenty, and possibly Thames Coromandel District Council, in the near-term, after breaking away from the prospective group earlier this month.

Tauranga mayor Mahé Dysdale wanted a regional water entity but his council initially decided not to pursue the model until 2028, and did not name a partner in this.

Tauranga and Western Bay of Plenty would now form a joint water CCO from July 1, 2027. Thames Coromandel District Council may also join, depending on ongoing discussions.

Tauranga Mayor Mahé Drysdale said after his council decided not to join a regional grouping, it received letters from Western Bay of Plenty, Thames Coromandel, and the Department of Internal Affairs (DIA).

DIA indicated a Crown facilitator would be appointed to Western Bay of Plenty if a regional model did not proceed, Drysdale said, as the neighbouring council would not be able to put together a financial services plan without Tauranga.

“We probably wouldn't be compelled, but we'd certainly be asked, and there would have been a negotiation process to see if we would consider bringing them into the tent,” he said, of the DIA letter.

Drysdale said it was the best outcome for both councils. Tauranga ratepayers would be billed $3200 less over 10 years as a result, and for Western Bay it may be as much as $1300 less a year during the “big years”.

“Our charges almost double over that 10-year period, and that's very similar to a lot of other councils,” he said.

The councils were now finalising their joint plan for September 3.