By Michael West: Council Candidate Hamilton West
As New Zealand relocates water services into council-controlled organisations (CCOs), the stakes for ratepayers have never been higher. Clean water and good sanitation are vital to the standards of living we expect and need, so those who control our waters wield immense power over household budgets and community wellbeing. To avoid burdening communities with inflated bills and sprawling bureaucracy, the new CCO must commit to rigorous transparency, procurement best practices, and competitive processes from day one.
Hamilton’s initial experience offers an early warning. In June 2025, Hamilton City Council (HCC) and Waikato District Council (WDC) announced a combined waters entity responsible for 90,000 connections, backed by a planned $3.6 billion investment over the next decade—$2.4 billion of which is growth-driven. Yet establishment costs have already ballooned by more than 20 percent, undermining confidence that the entity will deliver “Water done Well” without passing on hefty charges to ratepayers.
While the name ‘Water done Well’ suggests improvements we only need to look to the Hawke’s Bay, where household water rates are set to potentially soar to around $7400 per year in ten years1. Yes, that is Just Water. So how will Hamilton City Council manage ‘Water done Well’? Looking at the early indications does not instil a great deal of confidence. The fact that the establishment costs of our local controlled water organisation have already blown out by 20% does not fill you with hope2.
A closer look at the numbers paints a stark picture. In FY 2024, HCC and WDC collected $110 million in rates for water supply and wastewater. Following budgeted increases (16.5 percent for HCC and 11.9 percent for WDC in FY 2025), revenue should rise to $127.2 million—an average annual cost of $1,413 per connection. With growth forecast at 22 percent (roughly 19,800 new connections over 10 years), the entity must consider how to fund that growth as well as making necessary improvements to existing infrastructure. The planned investment of $240 million each year to support that growth seems unsustainable. Simple math shows each new connection would need to contribute $120,000 if rates alone were to cover these costs—an unaffordable burden for current and future ratepayers.
Debt restrictions offer little relief. A cap of five times annual revenue limits borrowing to $636 million at the outset; yet already $490 million of existing council debt is shifting onto the new balance sheet. Even generous assumptions about development contributions—$50,000 per new connection, totalling $100 million annually—leave a yawning shortfall that will inevitably land on household water bills or deferred maintenance, risking public health and environmental harm.
Avoiding this outcome requires more than financial gymnastics. The new CCOs must reject managerialism—the tendency to expand corporate ranks and inflate salaries at the expense of frontline service—by embedding merit-based hiring without political influence. As public sector expert Roger Partridge observes, when “anyone can do anything,” deep technical knowledge is devalued in favour of generic management skills, leading to flawed decisions and costly U-turns. In the waters-done-well context, executives should be appointed for demonstrated water-sector expertise, with transparent selection panels and publicly published appointment criteria to eliminate cronyism.
Shared best-practise infrastructure designs and procurement will be the heart of cost control. Best outcomes will emerge from competitive tendering portals where every contract opportunity and award rationale is available in real time. Clear evaluation criteria, mandatory conflict-of-interest disclosures, and independent audit mechanisms will deter inflated bids and insider deals. When firms know they’re bidding under a spotlight, cost savings naturally follow, leaving more funding for critical infrastructure upgrades.
Yet competition shouldn’t end with external providers. Multiple CCOs should vie to pilot innovative solutions internally. To ensure collective learning, each entity must commit to a shared-services repository, documenting successes and failures in accessible case studies.
Key performance indicators (KPIs) must reflect dual imperatives: cost efficiency and innovation. Metrics such as operating expense per kilometre of pipe, average repair times, and capital expenditure against budget will track financial discipline. Innovation KPIs—like the percentage reduction in greenhouse gas emissions, number of digital monitoring platforms deployed, or cost savings delivered through new technologies—will incentivise continuous improvement rather than risk-averse maintenance.
Democratic accountability cannot be an afterthought. While CCOs operate at arm’s length, councils must retain strategic oversight through statutory performance agreements. These agreements should empower elected members to set rate-increase caps tied to CPI growth or demonstrable service improvements. Annual public briefings, online KPI dashboards, and community reference panels will translate technical reports into ratepayer-friendly language, preserving the principle of “no rates without representation.”
Finally, billing practices must be customer centric. Auckland’s Watercare Services Limited issues invoices only to homeowners, leaving tenants to absorb fixed charges unexpectedly. The new CCOs should adopt dual-account systems, ensuring both property owners and tenants receive clear itemised bills, and reducing tenancy disputes that drive up administrative costs and tribunal cases.
The waters reforms represent a generational opportunity to modernise New Zealand’s water infrastructure. But without stringent guardrails—transparent governance, procurement integrity, merit-based staffing, and inter-CCO competition—the promise of improved service will be eclipsed by bureaucratic bloat and ballooning rates. By insisting on these principles from the outset, councils can ensure that “Water done Well” delivers value for every ratepayer, now and for generations to come.
References
1. RNZ, Alexa Cook, “Hawke’s Bay residents outraged over council’s proposed water rate hike,” 20 June 2025.
2. Stephen Ward, Waikato Times, “Hamilton-Waikato waters establishment costs up more than 20%,” 28 May 2025.
3. Roger Partridge, “The death of public sector expertise: How the rise of the generic official hollowed out the state,” Plain Thinking blog, 15 August 2025.
