Police were called and spoke to both men.
The cyclist admitted he should not have squirted water at the 79-year-old, Snr Sgt Bond said.
Inquiries are ongoing as police were seeking witnesses and CCTV footage.
Later on in the day, police attended a second road assault in George St.
Snr Sgt Bond said a 28-year-old man “wanted” to get into fight with a delivery driver on a bike.
The man started assaulting the delivery driver for no apparent reason and knocked over his bike.
Both the man and the delivery driver threw punches at one another, and during the altercation the 28-year-old put the driver into a headlock and strangled him for some time.
The 28-year-old took off and was later located by police in Bond St threatening somebody over the phone.
The man was arrested and charged with assault and intent to injure.
He will appear in Dunedin District Court on Thursday.