There are fears in the Ruapehu District about the effect on the economy and workforce of large water services cost increases.
Ruapehu Mayor Weston Kirton says the district must proceed with its planned two-council water organisation with Whanganui, despite fears household charges could rise by 92% within eight years.
“While we recognise those concerns, council is legally committed to establishing the two-council model,” Kirton said.
“What is important is how we set it up – and we are doing that together with Whanganui in a way that directly addresses affordability.”
A 92% increase has been forecast in a Government agency assessment of the joint water services delivery plan for the Whanganui and Ruapehu district councils.
The councils are to establish a shared water services council-controlled organisation (WS-CCO) responsible for drinking water, wastewater and stormwater infrastructure.
The Department of Internal Affairs (DIA) assessment said households in Ruapehu could see water charges rise from an average of $2061 a year to $3954 over the next eight years under the projections.
The forecast has triggered concern among residents and community campaigners, some of whom have urged the Ruapehu council to abandon the plan in favour of a larger regional model to spread costs more widely.
Kirton said the projected increase had “understandably created anxiety in our communities”.
The plan states overall affordability for both districts, compared with median household income, is projected to drop from 2.2% in 2024-25 to 2.7% in 2033-34.
However, for Ruapehu’s urban community – which excludes farming communities and the Waiōuru township – affordability is expected to drop from 3.4% to 4.9% of median household income, almost double the DIA’s affordability benchmark of 2.5%.
In contrast, residential properties in Whanganui are expected to pay $1407 a year, equivalent to about 1.7% of median household income.
The two councils initially considered partnering in a larger Manawatū-Whanganui grouping and progressed a partnership of three with Rangitīkei.
However, Rangitīkei opted to work with Palmerston North and Horowhenua.
Last July, Ruapehu council voted 6-4 against joining a proposed multi-council water services entity with Palmerston North, Horowhenua, Rangitīkei and possibly Whanganui, despite staff advice that the larger grouping could save the district about $38.7 million over seven years.
Instead, councillors opted to pursue a smaller partnership with Whanganui, which had yet to confirm its own approach to future water services.
Kirton opposed the move, saying modelling showed water charges would be significantly higher under the two-council option.
In August, he urged councillors to reconsider, warning the decision could cost residents up to $1000 more a year and push water charges beyond the DIA’s affordability benchmark.
His call was rejected 7-3.
Kirton said Ruapehu and Whanganui would attempt to address affordability concerns by embedding commitments around fair pricing in the governance documents for the new organisation, including its constitution and statement of expectations for the yet-to-be-appointed board.
“Both [Whanganui] Mayor Andrew Tripe and I recognise that many Ruapehu water users have genuine concerns about future water costs,” Kirton said.
Tripe said the councils would embed clear expectations around equitable pricing and responsible financial management from the outset.
“That is essential to giving our communities confidence in the new entity,” Tripe said.
Secretary for Local Government Paul James, who approved the joint plan, told the two councils they should continue exploring ways to reduce affordability pressures.
Possible options included harmonising water charges across the two districts or expanding the organisation in future to include other councils.
“That flexibility is significant,” Kirton said.
“It enables the WS-CCO to explore opportunities to achieve greater scale and improved affordability over time.”
The two-council arrangement has drawn criticism from some residents.
A social media campaign page, Affordable Water Ruapehu, said the projected increases could have serious consequences for Ruapehu’s economy and workforce.
It said the two-council model could become a “direct handbrake” on the district’s tourism sector if costs rose as forecast.
“If water bills rise to levels well beyond affordability, as current projections indicate, the district will struggle to attract and retain the workforce tourism depends on,” the campaign page said.
“Workers cannot be expected to relocate, or stay, in a district where basic services like water are unaffordable.”
It said holiday homeowners would also feel the impact, warning that large increases in fixed water charges would add significant costs to properties occupied only part of the year.
Those costs could be passed on through higher accommodation prices, potentially making the district less competitive against other destinations.
“The two-council WS-CCO with Whanganui is shaping up to be a financial disaster for Ruapehu, with water charges becoming unaffordable for most households,” the campaign page said, urging residents to “demand affordable services”.
LDR is local body journalism co-funded by RNZ and NZ On Air.