An extra $1.5 million in ratepayer funding has been approved to cover a cost over-run at Kerikeri's new sewage treatment plant.

The increase brings the total cost of the plant — the Far North District Council's biggest project to date — to $27.1m.

It comes amid claims by the Kerikeri Ratepayers' Association that the town's explosive growth means the plant will be at capacity as soon as it opens.

The council denies that, saying on its website that the plant will have capacity for another 8-10 years' growth.

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The extra funding was approved at the council's August 29 meeting in Kaikohe.

As a result, households in the wastewater scheme's ''area of benefit'' are now likely to pay a capital rate of $892 in 2020/21 instead of the previously estimated $835. The 2019/20 capital rate is $395.

A council report stated the new plant site was shifted in 2018 from a disused quarry to another site on the same property off Shepherd Rd, to allow greater capacity and reduce costs.

The site change had led to cost savings but not on the scale envisaged. It had also increased the design and construction costs. As a result the plant, which was about 45 per cent complete, was likely to go 5 per cent, or $1.5m, over budget.

The project had also been hit by a nationwide increase in construction costs.

Council infrastructure manager Andy Finch told the meeting the cost over-run was ''unfortunate''. Since then a new project manager had been appointed, giving the council greater oversight.

If councillors voted against the extra funding the project could not be completed, he said.

Councillor John Vujcich said he was ''disappointed but not surprised''.

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''I have grave concerns about the growth of Kerikeri and whether it [the new plant] will meet future needs,'' he said.

Given the delays councillor Sally Macauley asked whether the project would still meet the deadline for a crucial $7.3m Ministry of Health subsidy.

Finch said there were no concerns about the subsidy and the ministry was being kept informed.

Councillors also asked about an analysis by Kerikeri Ratepayers' Association member and former council employee Alec Cox, who tallied up the number of sewage connections in the "area of benefit" and those which had been approved but had yet to be built.

He concluded the plant would be at capacity as soon as it was built and claimed council calculations were flawed because they treated each property as a single connection, whereas the new retirement village on Hall Rd, for example, would have more than 200 connections when complete.

Cox called on the council to halt further subdivisions until the plant's capacity was expanded.

Finch told councillors he had not had a chance to study Cox' letter in detail but believed some of his assumptions were incorrect.

In any case the new plant's modular design meant extra capacity could be ''bolted on'' in future.

Councillor Dave Hookway proposed a motion calling on the incoming council to conduct a full review of the project, which was rejected under standing orders. The motion to approve the extra $1.5m was passed with six votes in favour and Hookway against.

The council's website states the new plant will cater to 1090 properties connected to the current scheme plus 350 central Kerikeri properties still using septic tanks and 350-400 new properties in the area of benefit. It was anticipated that would be enough for the next 8-10 years.

Finch told the Advocate the 8-10 year timeframe was based on current growth projections for Kerikeri, but could be reduced by the Hall Rd retirement village and other developments planned in the area of benefit.

However, the plant could be expanded in two stages, each with a capacity for another 800 properties.

''We believe this design strikes a balance between accommodating even the most optimistic growth predictions for Kerikeri and being affordable for current Kerikeri ratepayers,'' Finch said.

Kerikeri's current sewage plant was built 25 years ago, is operating beyond its capacity and is regularly in breach of its resource consent.