Palmerston North waits for willing water partners

Saturday, 31 May 2025

The Palmerston North City Council is waiting for other councils in the region to confirm their preferred water services plan.

Palmerston North’s future water services are likely to be provided through a partnership with the Horowhenua and Rangitīkei districts, while negotiations are likely to continue to form an even bigger council-controlled organisation.

The city council on Wednesday will consider its best way forward on Local Water Done Well reforms after Kāpiti and Manawatū voted themselves out of the council and ratepayers’ preferred option of “the four” – Palmerston North, Horowhenua, Kāpiti and Manawatū.

The Palmerston North-centred threesome emerged as a likely contender after Rangitīkei resolved that working with the city and up to three other districts was its preference.

Decisions are yet to be made by Ruapehu and Whanganui. Ruapehu is consulting its ratepayers about the potential five-council model and was expected to make a decision on June 25.

The Whanganui District Council has deferred its decision to early July.

The continuing uncertainty about how the reforms would be implemented in the region was further complicated this month when Local Government Minister Simon Watts wrote to councils stressing the importance of working at a scale that would be financially sustainable.

The advice was that the new entities should include 50,000 or more water connections to gain efficiencies of scale.

A five-strong council-controlled organisation could be the solution to Palmerston North’s future water and wastewater services. (File photo)

That threw the viability of a proposed Whanganui-Ruapehu-Rangitīkei partnership into doubt and has prompted Rangitīkei to look to Palmerston North, while Ruapehu and Whanganui are yet to make decisions.

The Palmerston North and Horowhenua partnership would start below the 50,000-connection threshold.

Adding in Rangitīkei and Ruapehu would get to more than 52,000, and with Whanganui it would have more than 70,000 connections.

Palmerston North mayor Grant Smith said at a councillor workshop this week that the modelling for the potential five-council partnership showed the real advantages of scale.

It would boost the borrowing power of the new entity, provide the greatest efficiencies, be able to attract and retain specialist staff, and deliver the greatest savings for ratepayers.

Paying for Palmerston North’s wastewater management overhaul will be one of the challenges for future investment in water services.

For Palmerston North, the cost of going it alone could see ratepayers paying up to $3493 or more in 10 years’ time, including a separate levy to pay up to $480 million for the Nature Calls wastewater management project.

With Horowhenua included, that 10-year figure would be $2673, going down to $1661 at 30 years, and total savings across the group of $85m.

The four-council group would see a 10-year cost of $2690 going down to $1654 at 30 years, and total savings of $99m.

With Whanganui included, costs to Palmerston North ratepayers would not go down dramatically, but there would be total savings of $370m across the group, shared across a greater number of connections.

A view of Levin’s water treatment plant. The Horowhenua District Council has been first to confirm it wants a partnership with Palmerston North for future water services.

The costs for ratepayers from other councils would differ depending on the level of investment they needed in their areas.

Bringing all ratepayers across the boundaries onto a single, standard water charge – harmonisation – would not happen until later.

The starting rule would be that no ratepayers would pay more than if they went it alone on the costs in their existing long-term plans.

At the workshop, councillor Pat Handcock asked about whether Manawatū and Kāpiti’s decisions to go it alone with less than 50,000 connections would be approved.

Council chief executive Waid Crockett said Palmerston North needed to make the best decisions it could for its ratepayers with the information available rather than conjecture about what could happen to those smaller councils’ decisions to date.

Palmerston North planned to bring a joint water services delivery plan to a council meeting in August to meet the deadline for lodging the plan with the Department of Internal Affairs by September 3.