Part 1: Introduction

Local authorities: Planning to meet the forecast demand for drinking water.

In this Part, we discuss:

Why we did our audit

Access to good quality water for drinking, cooking, and hygiene (that is, bathing and clothes washing) is essential to our health and well-being.

About 87% of our population receives drinking water from local authorities. A large amount of public money is invested in supplying drinking water. In 2009, the country's infrastructure for drinking water was valued at about $11 billion. For the years 2009 to 2019, local authorities' operational expenditure for supplying drinking water was estimated at an average of $605 million each year. The average annual capital expenditure for 2009 to 2019 was estimated at $390 million.

The public has high expectations that the services supplying us with drinking water will continue for years to come, despite the challenges some local authorities are facing in ensuring that they do.

Many parts of the country are experiencing increasing demand for water, which puts pressure on water sources and the capacity of the infrastructure (that is, the pipes and water treatment plants). Augmenting or replacing drinking water supply infrastructure can be challenging for local authorities because it is expensive. It is important that local authorities ensure that they have considered and planned for the forecast demand for drinking water, so that they can have adequate infrastructure and strategies in place to meet the needs of their community.

The focus of our audit

We carried out a performance audit to see whether eight local authorities were managing their drinking water supplies effectively enough that they could meet the likely future demand for drinking water. We expected the local authorities to be looking ahead at least 10 years, which is the period they have to cover in their long-term council community plans (LTCCPs).

In our view, effectively managing their drinking water supplies means:

  • having and using good quality data (for example, about water supplies and water consumption, existing population patterns and expected changes, and existing land use patterns and expected changes);
  • using a reliable technique to forecast what the future demand might be, and verifying that forecast;
  • thoroughly assessing a wide range of supply and demand management strategies; and
  • using the above information to build or upgrade infrastructure at the right time and to the right scale.

We focused on the demand for drinking water that is supplied by local authorities for domestic or commercial purposes and treated to drinking-water standard (potable water).

How we carried out our audit

We audited eight local authorities. We chose them by analysing information from LTCCPs, taking advice from experts, and considering factors such as:

  • the size and scale of the local authority (we wanted a mix of large, medium, and small local authorities);
  • North and South Island differences;
  • matters that increase demand for water, such as population growth, commercial development, and seasonal tourism;
  • water supply shortages caused by environmental factors, such as drought or competition from other users; and
  • examples of good practice in managing drinking water.

The eight local authorities we chose were:

  • Tauranga City Council;
  • Opotiki District Council;
  • South Taranaki District Council;
  • Kapiti Coast District Council;
  • Nelson City Council;
  • Tasman District Council;
  • Christchurch City Council; and
  • Central Otago District Council.

Appendix 1 sets out some background technical information about these local authorities and how they supply drinking water.

We reviewed documents and interviewed staff and councillors at each local authority to understand each local authority's:

  • approach to forecasting the likely demand for drinking water;
  • approach to developing strategies for managing its drinking water;
  • levels of service and how they affect its forecasting and choice of strategies;
  • approach to risk management and contingency planning;
  • plans to implement the strategies through commitments in LTCCPs, annual plans, and other local authority planning documents;
  • governance arrangements for the delivery of drinking water;
  • asset information used to forecast the likely demand for drinking water and to choose strategies;
  • response to the requirements of the Health (Drinking Water) Amendment Act 2007;
  • approach to complying with relevant national policies and regional plans under the Resource Management Act 1991;
  • views on limitations, problems, or barriers to its forecasting and to its strategies to meet the forecast demand for water; and
  • approach to integrating its strategies for managing drinking water across its planning documents, including the links between water services assessments, LTCCPs, and District Plan growth indicators.

We visited drinking water treatment plants, and sought advice from an expert to help us understand how drinking water supply is managed.

What we did not audit

We did not audit:

  • how local authorities manage wastewater services or storm water;
  • the provision of water for non-domestic purposes, such as irrigation for farming;
  • compliance with the drinking water standards, although we took account of how the drinking water standards were affecting what local authorities were doing to meet the forecast demand for drinking water; and
  • the allocation and management of freshwater1 resources, although we took this into account to the extent that it affected access to drinking water supply.

The Ministry of Health sets, publishes, and monitors compliance with New Zealand's drinking water standards. The drinking water standards were last updated in 2008. The standards are published as Drinking-water Standards for New Zealand 2005 (Revised 2008).

We did not audit any local authorities in the Auckland region because we plan to do that as a separate performance audit after the transition to one local authority for Auckland is completed.

Structure of our report

We have structured the rest of our report as follows:

  • Part 2 describes, briefly, how drinking water is supplied, why demand forecasting is important, and what sorts of strategies can be used to meet the forecast demand for drinking water.
  • Part 3 summarises our conclusions about the ability of each of the eight local authorities to effectively manage the supply of their drinking water to meet the forecast demand for it.
  • Part 4 sets out our conclusions about the local authorities' forecasting. There are two recommendations in Part 4.
  • Part 5 sets out our conclusions about local authorities' progress in implementing relevant legislation and national and regional policies.
  • Part 6 sets out our conclusions about the strategies that local authorities have chosen to ensure that they will have enough drinking water to meet the forecast demand. There are five recommendations in Part 6.
  • Part 7 sets out our conclusions about local authorities' progress with implementing their strategies. There is one recommendation in Part 7.
  • The appendices provide background technical information about supplying drinking water and about the eight local authorities' work in supplying drinking water.

1: Freshwater is water without significant amounts of dissolved sodium chloride (salt). It usually includes rain, rivers, ponds, and most lakes. We published a report on freshwater management in 2005, called Horizons and Otago Regional Councils: Management of freshwater resources. This report is available on our website,

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