Angry Mangawhai ratepayers are putting signs on their homes to show they are defying the Kaipara District Council and won't pay controversial rates.

The council has produced a long-term plan (LTP) proposing a 31 per cent average rates increase for 2012-13 to cover its $80.7 million debt, which includes about $60 million for the Mangawhai sewerage scheme.

But some property owners face rates boosts far bigger than 31 per cent. Expected increases of more than 100 per cent are common and, on the extreme end of the scale, the owners of the Riverside Holiday Park - one of the four campgrounds at Mangawhai - have the prospect of their rates rising from $6316 to $84,850 a year.

Mangawhai had a population of 813 in the 2006 census. But more than 2000 people took part in a protest march in the town on May 12 before meeting with the council to oppose the LTP and ask about the $9.5 million in rates, which the council had admitted was collected incorrectly.

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Since the meeting, the Mangawhai Ratepayers and Residents' Association (MRRA) has written to Local Government Minister David Carter, explaining how the council has a "ruinous level of debt'' and urging him to take action including:

# Declaring the council insolvent and appointing a review authority to manage the local authority through the insolvency.

# Having a receiver work alongside the review authority to keep minimum essential council functions going.

# Cancelling all illegally incurred debt and pursuing the former council CEO and former and sitting councillors for its recovery.

# Recovering overspends, particularly on capital works where it is plain fraud or gross incompetence is involved.

# Pursuing council advisers, through the courts if necessary, for costs following defective or misleading advice.

# Disposing of underperforming council assets.

# Assessing the Crown's culpability in what the association called "turning a blind eye to illegal activity''.

MRRA treasurer and former Kaipara councillor Bruce Rogan told the Minister: "A typical commercial bankruptcy proceeding has to take place, after which the district can be reconstituted on a workable basis, with fresh elections to replace those councillors who are then unable or unwilling to stand.''

A spokeswoman from Mr Carter's parliamentary office said the Minister was considering a previous report produced by the Kaipara District Council.

Mr Carter was aware of the concerns raised by the MRRA, she said. He was expected to complete his analysis of the council report soon and would then be in a position to comment.

Meanwhile, Northland MP Mike Sabin has been keeping the Minister informed about grassroots views on the Kaipara rating issues.

Mr Sabin said he had also been organising meetings with the Land Transport Safety Authority to try to get one-way bridges at Matakohe replaced and driver licence testing reinstated at Dargaville.