Staff morale at the Hamilton City Council is diving after workers heard they were being penalised for costly management mistakes over the Claudelands Event Centre.
The Public Service Association, which represents about 150 of the staff, has slammed the council for taking $700,000 off the $1.7 million earmarked for wage negotiations and performance-related salaries in 2012/13.
Council chief executive Barry Harris last Thursday suggested cutting any pay rise from 3 per cent to 2 per cent as the council tried to absorb the projected $900,000 shortfall for Claudelands from 2012/13.
The council supported the move rather than absorbing the bill through higher rate increases.
The remaining $200,000 will be covered by operational savings and Mr Harris is still trying to figure out how to cover the $2.6 million deficit projected for the coming year.
But PSA national secretary Brenda Pilott said staff were angry they were paying for other people's mistakes.
"The consequences are being felt by the average staff member who had nothing to do with those things."
Ms Pilott said she had met Mr Harris before Christmas to raise members' concerns about the culture at the council and low staff morale after public scrutiny of the council and the intervention of the former Local Government Minister and had been reassured he was addressing the matter.
Last year 165 staff left compared with 151 departures the year before, according to information the Herald obtained under the Official Information Act.
A staff member who spoke on the condition of anonymity said staff felt betrayed. "Staff are really, really gutted and disillusioned ... particularly [at the decision] being made without consultation with staff."
The PSA said staff were further exasperated by learning Mr Harris' performance bonus was protected because it was built into his $360,000 pay package.
Mr Harris declined to speak last night but a council spokeswoman reiterated a message sent to staff expressing regret at the action.