Summary
- In May 2025, Hamilton City Council and Waikato District Council decided to create a new water company, to manage three waters services (drinking water, wastewater, and stormwater).
- The new Council-controlled Organisation (CCO) has been named “IAWAI – Flowing Waters” and was incorporated in July 2025.
- According to the Hamilton City Council website, the new water company “will manage 90,700 water connections for households and businesses. On our behalf, it will invest around $3.3 billion on water infrastructure over the next decade”.
- On 26 June 2025, a draft “Water Services Delivery Plan” was made public for the new water company. This plan contained a projection that the average household water cost would increase from $1,285 (in 2024/2025) to $4,347 (in 2033/2034). [See page 343 of the 26 June 2025 Council Agenda for the projection table.]
- The draft also stated that “Water services charges as % of median household income” are only 1.0% in 2024/2025 and are projected to increase to 2.6% in (in 2033/2034). However, the draft claims “that 4.5% of median household income represents a reasonable affordability benchmark”. [See page 344 of the 26 June 2025 Council Agenda].
- The cost projections and the “reasonable affordability benchmark” remained in the finalised “Water Services Delivery Plan” dated 30 June 2025. [See pages 116-118 of the Water Services Delivery Plan]
Key Quotes
Table 31 on Page 343 of the 26 June 2025 Council Agenda
“As mentioned below, it has been considered that 4.5% of median household income represents a reasonable affordability benchmark. As shown in Table 31, the average water services charge per connection is below the 4.5% benchmark in every period of the forecast.
We note that in the initial years the average charge as a percentage of median household income is well below the benchmark. This could be an indication that water services have historically been under-funded or otherwise subsidised by other revenue sources. The above analysis is indicative only, and will not represent the actual cost to individual users across the region. We also highlight that the benchmark is not definitive in its application and should be interpreted as providing some indication of affordability only.”
Page 344 of the 26 June 2025 Council Agenda
“Hamilton City Council and Waikato District Council received formal approval from the Secretary for Local Government for their joint Water Services Delivery Plan (WSDP) on Thursday 23 July 2025, confirming a new direction for the delivery of drinking water, wastewater, and stormwater services.
The WSDP was developed in response to the Government’s Local Water Done Well framework, which requires councils to prepare a one-off Water Services Delivery Plan to demonstrate how water services will be financially sustainable. The plan builds on and is broadly consistent with each council’s existing Long-Term Plan.
Under the approved plan, IAWAI – Flowing Waters, the newly established council-controlled organisation, will be responsible for providing water and wastewater services (and maintaining the relevant infrastructure) across both councils, as well as delivering stormwater services under contract to the councils.
The WSDP provides a comprehensive overview of current infrastructure, service coverage, and regulatory compliance, while identifying the investment required to support future growth, maintain service levels, and enhance environmental outcomes.”“A new way to deliver water services” on the Hamilton City Council website, 25 July 2025
“Research into industry affordability benchmarks has been undertaken, and the outcome determine that a benchmark of 4.5% of household income is a reasonable threshold to apply for assessing affordability within this plan.
This conclusion was made based on the following:
The Environmental Protection Agency’s (EPA) Water Affordability Needs Assessment report, issued in December 2024. In this report it was considered that 3.0% to 4.5% of median household income was a reasonable range for assessing affordability for drinking water and wastewater bills. This assessment does not include the cost of Stormwater.
The 4.5% threshold is widely used in literature. The use of a percentage of income metric is also comparable to affordability metrics for other essential services, such as spending on electricity.
There is no definitive measure of affordability, with variants of the percentage threshold (ranging from as low as 2% to as high as 10%) noted in other reports.
Given that the 3.0% – 4.5% range mentioned in the EPA report was for water and wastewater only, whereas other literature includes stormwater, it was considered appropriate to adopt 4.5% rather than 3.0%. We also note that due to the inclusion of stormwater in the analysis presented below, 4.5% can be considered to be conservative.
There does not appear to be any authoritative benchmark to measure affordability. Nonetheless, the sources mentioned above provide useful reference points, and confirm that the projected water charges are broadly in the range of what would be considered affordable.”
Page 118 of the Water Services Delivery Plan
Further reading on this issue:
Concerns that areas of Hamilton are “wastewater network constrained”
OPINION: Serious Mismanagement and Lack of Accountability with Water Services
