Martinborough's growth will be stunted for two years as a result of the town's non-compliant wastewater treatment plant.
South Wairarapa District Council (SWDC) announced on Thursday that applications for new wastewater connections in Martinborough are being "put on pause" for the time being "because the town's wastewater plant has failed to meet performance and compliance standards".
The council said it would honour all permits, resource management, and building consents that it had already received and approved, and a connection to the wastewater network would be made.
However, the decision will impact developers and people seeking to build new homes in the town.
"We regret having to make this decision, which we know will temporarily slow growth in the region," a council spokesperson said.
"We will pause new connections for only as long as needed.
"Companies and individuals considering new development, and who are currently preparing to make an application, should contact the council and discuss their situation."
The council said yesterday the Martinborough wastewater treatment plant had also reached its design capacity as population growth and annual connections had far exceeded expectations.
Significant performance and compliance issues resulted in Greater Wellington Regional Council (GWRC) issuing an Abatement Notice for the plant in August 2022.
The public health risk from previous discharges to the river is very low and independent specialists engaged by GWRC have assessed the environmental risks as negligible.
However, an Abatement Notice means SWDC is required to act to remedy the identified issues and return the plant to compliance by a certain date and remain in compliance thereafter.
In addition, specialist advice from the council's water services provider - Wellington Water - is that additional connections would further compromise the plant's performance, increasing the risk to the environment, public health, and safety.
There is also the possibility of more severe enforcement action from GWRC.
This means the council is obliged to pause applications for new connections to the Martinborough Wastewater Treatment Plant, effective immediately.
An SWDC spokesperson said the council has already started working with customers who have a connection request in train to clarify their status.
Interim chief executive Paul Gardner said Wellington Water, alongside SWDC, was urgently working on a delivery plan to bring the plant back to full compliance as soon as possible, while keeping GWRC updated on progress.
SWDC has prepared a draft compliance delivery plan which sets out how it plans to address the issues with the Martinborough wastewater treatment plant.
The plan is expected to be submitted to GWRC by the end of May and, assuming it is accepted, funding will be secured, and work will begin.
Growth studies to support the second stage of work will be carried out simultaneously with the compliance work over the next two years to fully inform the design of the required capacity increase.
South Wairarapa Mayor Martin Connelly and councillors said they regretted that new wastewater connections had been put on hold, but fully supported the decision to do so.
"We hope to have the plant compliant within 24 months," Connelly said.
"We will pause new connections for only as long as needed."
Funding for both components of the staged plan is not yet confirmed, although some initial funding to start work is included in SWDC's proposed 2023/24 Annual Plan.
Significant additional funding will be required from either the council's 2024-34 Long-term Plan or the new entity that is created by central government's water reforms.
The plant is located at the end of Weld St in Martinborough.
Local Democracy Reporting is Public Interest Journalism funded through NZ On Air