The Government plans to take water services away from councils and create four new agencies to run them - to the outrage of some councils.
Why are we changing this now?
Water infrastructure in New Zealand has had so little investment for so long that it has turned into a monster of a problem.
Stormwater, wastewater, and drinking water are currently managed by 67 territorial authorities, Watercare in Auckland, and Wellington Water.
This means no one is responsible for monitoring or overseeing the performance of the whole system.
Water pipes have been left to languish under the ground by many councils and local government politicians, who've focused on more exciting ribbon-cutting projects and keeping rates increases down.
A report by the Water Industry Commission for Scotland estimates between $120 billion and $185b will be needed over the next 30 years to bring water infrastructure up to scratch across New Zealand.
Even as councils try to respond to the looming crisis by almost doubling the average national spend on water, it still leaves a shortfall of potentially more than $100b over the next 30 years.
One of the most frightening consequences of inadequacies in water management was the Havelock North gastroenteritis outbreak.
It made 5500 people sick, resulted in the hospitalisation of 45 residents, and contributed to three fatalities.
One in five Kiwis are supplied with drinking water that is not guaranteed to be safe from bacterial contamination, Ministry of Health figures show.
The environment is also at stake, such as when 6.5 million litres of wastewater spewed into Wellington's harbour after a critical wastewater tunnel collapsed under the CBD.
It was the start of summer and people weren't allowed to swim in the harbour for days.
Local Government Minister Nanaia Mahuta says "the case for change is compelling".
What will reform look like?
Last week the Government revealed proposals to move the ownership and management of water infrastructure from local councils and into the hands of four water services agencies, split regionally.
One would cover Northland and Auckland, the second includes the centre of the North Island and Bay of Plenty, and the third encompasses the east coast down to Wellington as well as the top of the South Island.
The final entity covers the rest of the South Island.
A Regional Representative Group of local authority members and tangata whenua would vote on an independent panel to appoint the board members to govern each entity.
Public ownership of these entities is a bottom line for the Government.
Any serious future privatisation proposal would require a referendum and the entities would not pay dividends, making them unattractive to potential alternative owners.
The water services entities would be financially and operationally separate from local authorities, meaning they could borrow more.
How will reform affect your water bill?
Number crunching behind the case for the Government's reforms calculate household water bills would be less under the new entities than they otherwise would be.
Meeting the massive estimated $185 billion investment cost will be challenging for most local authorities and result in ballooning household water bills without reform.
Small rural communities would be hit hardest.
Current water bills in rural areas range from $500 a year to $2,600, but could be as much as $9,000, in today's dollars, by 2050 without reform.
In metropolitan areas, some bills could increase up to seven times what they are now.
Some bills in these areas could be as high as $3,500 a year.
But with reform, the cost of providing water services to communities could reduce by as much as 50 per cent.
Evidence suggests entities would need to supply at least 600,000 to 800,000 citizens to realise full-scale efficiencies.
What do councils think?
It is becoming increasingly clear many councils are unconvinced by the Government's proposal to overhaul three waters management.
Northland and Auckland would be covered by the same entity, but Whangarei District Council has voted to opt out while Auckland mayor Phil Goff is refusing to buy in.
Whangarei mayor Sheryl Mai told the Northern Advocate there was concern about what it would mean for the local assets ratepayers had paid for, and the risk Northland would come second to Auckland under the model. It has decided to opt out until more details are known.
Goff says ratepayers have invested billions in Watercare, which is already achieving the scale and professionalism in water supply the Government is seeking for the country through reform.
He is concerned Auckland Council could have less than 40 per cent representation in the governance of a new entity, despite 92 per cent of the entity's assets being from Auckland.
Kāpiti mayor K Gurunathan says while the plan continues to have the support of his council, the devil in the detail could end in a "turd degree burn for ratepayers".
He doesn't want his constituents being deprioritised and paying for the likes of Wellington City's crumbling water infrastructure just because Kāpiti has proactively invested in its water services.
Meanwhile, Waimate Mayor Craig Rowley says a taxpayer-funded ad campaign for reform shows a complete lack of respect for local government.
Thor: Ragnarok and Hunt for the Wilderpeople actress Rachel House lent her voice to the ad saying in it: "Imagine Aotearoa without good water – what a stink as place that would be"
She then describes a number of scenarios where filthy water is creating distress for the cartoon characters depicted.
Those comments have been criticised by regional mayors, who are upset with the implication they are doing a poor job of maintaining their water assets.
Have councils failed to do their job in the past?
There is no better example of a council failing to do its job in the past than Wellington City Council.
Wellington has become the poster child for New Zealand's water infrastructure crisis.
High-profile failures include a critical wastewater tunnel collapsing under the CBD and two sludge pipelines breaking.
Trucks, also known as "turd taxis", had to transport sludge for months until the pipelines were fixed.
Just a few weeks ago raw sewage spilled onto part of Lambton Quay because of a blocked pipe. Geysers have sprung up in Mt Victoria and Aro Valley in spectacular fashion.
Water pipes have been described as an "unsexy" thing for councils to spend money on.
Cycleways, new stadiums, and rainbow crossings could be seen as far better ribbon-cutting ceremonies than a new wastewater pipe.
The interesting thing about Wellington's situation is people have started to really care about money being invested in water pipes since poo appeared on the street.
Water networks are often taken for granted, until they start erupting left right and centre and boil water notices are put in place.
Wellington City Council just signed off on a 13.5 per cent rates increase, which residents seemed accepting of as long as their money was going to be spent on fixing the pipes.
Some councils are making the argument their water networks are fine, they've invested enough money, and don't have the same problems as Wellington.
But some of Wellington's pipes are more than 120 years old.
The question at stake is not so much whether a city's pipes are in good condition now as it is the ability for councils to sustain the needed future investment for ageing networks.
Is this a power grab?
Local government is certainly under the microscope. The water reforms and upcoming changes to the Resource Management Act will create big changes.
Mahuta has also announced an independent review of local government, including what it does, how it does it, and how it pays for it.
"From there, they will explore what local government's future looks like, including roles, functions and partnerships, representation and governance, funding and financing", she says.
National's local government spokesman Christopher Luxon says it must be for councils to decide how they do right by their communities.
The party agrees there are complex problems with water management and supports a stronger water regulator with more power to set and enforce standards.
"We believe we should be incentivising change where it is led locally and able to happen organically – not dictated by the Minister.
"National will continue to protect local accountability and strongly oppose the Labour Government's centralisation and control agenda."
The big issue now is whether these reforms will remain as what's been described as an opt-in or opt-out for councils.
Mahuta currently won't rule out forcing councils into it, although she hopes they will voluntarily come to the table.
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