Palmerston North adopts milestone water plan

Published on 14 August 2025

Palmerston North City Council has reached a major milestone by adopting its joint Water Services Delivery Plan, which outlines how water services will be managed in the future. 

The plan has been developed with Horowhenua and Rangitīkei District Councils, who we will be partnering with to set up a jointly-owned council-controlled organisation responsible for water services. 

The plan sets out how the three councils will collaborate to deliver drinking water, wastewater, and stormwater services in the coming years. 

Including stormwater marks a change from what was signalled during consultation with our community. Originally, ownership of stormwater assets was to remain with our council, with day-to-day operations contracted to the new organisation. However, further government guidance on water service regulation means transferring stormwater responsibility to the new council-controlled organisation will help avoid duplication, reduce costs over time, and simplify governance. 

Mayor Grant Smith said adopting the plan at an extraordinary Council meeting yesterday is an important step towards securing safe, sustainable, reliable, and efficient water services for the future. 

“Partnering with Horowhenua and Rangitīkei District Councils to create a joint water services organisation will see significant cost savings for our community both in the short and long term. This decision is about being smart with resources, meeting tougher regulations, and planning long term. Working with our neighbouring councils means we can deliver better services and better value, while keeping local control.” 

The plan explains that water assets will continue to be owned by the councils, who together will have joint oversight of the organisation. It will also be subject to more regulation, with the Commerce Commission monitoring pricing, and Taumata Arowai monitoring water quality.  

Horowhenua District Council has already adopted the plan, and today we’re expecting Rangitīkei District Council to do the same. Then the plan will be signed and submitted to the government. 

Before adopting the plan, our three councils sought initial feedback from the Department of Internal Affairs, which is overseeing water reforms, to give us the highest chance possible that the government will sign off on our plan in mid-December. 

All councils will continue to deliver services locally while working together on governance arrangements and the other foundation documents needed to set up the organisation.

Mayor Smith said the council will keep the community informed at key stages.

“We will update residents at every step. We will provide another update by mid-December when the government gives feedback on our plan, or earlier if there are any significant changes to the plan.”

Read the draft plan

Agenda of Council: Wednesday, 13 August 2025

The final signed plan will be uploaded to our Local Water Done Well hub at the end of next week. 

If you're reading the draft water plan, it’s important to understand a few key points about some of the information

In our consultation document, we presented costs without inflation and GST to help give our community more understanding of costs in today’s dollars. That’s because inflation, especially over 30 years, is very complex for water services. Inflation is also hard to predict, as we’ve witnessed over previous years. 

One of the requirements set by the government is that our plan must have costs that include inflation and GST. This means they appear different to what people may recall. 

The financial overview in the plan is also required to average the costs across the three council areas. However, our community pays far less for water than the other two council areas. While the averaging has been required by the government for the plan, there have been no decisions made about whether all customers across the three areas will be paying the same for water, or whether there will be localised pricing. There have also been no decisions made as to whether water will be charged on a fixed price, like we currently do, or by water metering. 

More government guidance is also coming out about things like consultation requirements for the new organisation, including a requirement for a significance and engagement policy. This will outline which matters are “significant” and will require community consultation. We expect that the pricing model will likely meet that “significant” requirement.