Our finances
Learn about our financial modelling, and what this means for councils and ratepayers.
Horowhenua District Council, Palmerston North City Council and Rangitīkei District Council have made sound investment decisions over many years and have planned for increased investment in drinking water, wastewater, and stormwater infrastructure through their long-term plans.
However, the cost of delivering water services is expected to increase across New Zealand.
These rising costs are being driven by a combination of factors, including:
- the need to replace ageing pipes, treatment plants, and pump stations
- investment to manage the impacts of climate change, such as more frequent and intense rainfall
- population growth and development increasing demand on networks
- new health and environmental requirements
- increased regulatory, monitoring, and reporting expectations.
What the modelling shows
Detailed financial modelling has been undertaken to help the community understand what the establishment of Central Districts Water will mean for councils and billpayers over time. This modelling compares the cost of continuing to deliver water services independently with the cost of delivering services through a jointly owned water organisation.
The modelling shows that, regardless of the delivery model, significant investment in water infrastructure is required and prices need to increase. With the establishment of Central Districts Water, costs are still expected to increase in the early years as long-planned upgrades are completed and systems are lifted to meet modern requirements.
Over the longer term, however, the total cost of delivering water services is expected to be lower than if councils continued on their own. This is primarily due to the ability to plan and deliver infrastructure more efficiently at scale, and sharing financial risk across a larger number of connections.
Importantly, the establishment of Central Districts Water will enable us to access higher levels of debt funding. This will help smooth costs and the financial impact on billpayers over time. Rather than individual councils or communities facing sharp increases in rates when major upgrades are required, Central Districts Water will be better positioned to manage investment in a more gradual and predictable way.
What this means for pricing
The financial modelling for Central Districts Water is based on a local pricing approach, which has been used as the starting point for developing financial projections. This ensures councils retain transparency and accountability for costs in their own communities, while still benefiting from working together.
Water metering and fair charging
As part of planning for long-term affordability and fairness, Central Districts Water is also considering how water services are charged and how water use is measured.
Water metering measures how much drinking water is used at a property. It can support fairer and more transparent charging by better aligning costs with actual use, while also helping to detect leaks and manage demand on the network.
The introduction of universal water metering across the Central Districts Water area is a possible option in the future, but no decisions have been made at this stage. Any changes to charging or metering would be considered carefully, with a strong focus on affordability, equity, and an opportunity for community feedback through consultations.
Horowhenua District Council has recently introduced district-wide leak detection and water metering. The council has transitioned to 100 per cent volumetric charging for drinking water.
Further information about pricing, charging approaches, and water meters will be shared as planning progresses.