Taupō District Council is reeling after councillor John Boddy made an inappropriate remark during a Strategy and Policy meeting earlier this week.
Multiple Code of Conduct complaints has been laid after Boddy used the phrase "N***** in the woodpile" in Tuesday's meeting.
Speaking in the meeting, Boddy said while he was pleased about the zero per cent rates increase, he "was also going to be the ****** in the woodpile..."
It was an old fashioned, racist cliche, captured on a video of the meeting, which left several people at the meeting visibly shocked.
"We are most disappointed," Mayor David Trewavas said. "Councillors, staff members ... very devastated. We sat there for a couple hours that day, consoling each other ... very upset with the situation."
Councillor Boddy would not respond to repeated requests for comment.
The council's chief executive is now considering a number of formal complaints about the comment. An independent investigation has also been set up to determine Boddy's fate.
Trewavas said the outrage provoked by the comment, was not just a result of the current global environment.
"We have many nationalities and people here in Taupō," he said. "It's just not acceptable. It's 2020 and we just don't do that, it's as simple as that.
"It might be a slip of the tongue, there's no more slips of the tongue when you're in the public arena, in your public space you must behave accordingly.
"My advice to the people is that we will investigate this disgusting and filthy behaviour and [it] certainly won't be tolerable under my watch - it will be severely dealt to."
Boddy would not respond to requests for comment.
It was a day of contrasts for the council, which shortly after the meeting, learnt the Government was giving the district $20 million from the Provincial Growth Fund. The money will go towards improving the town's CBD.
"Oh it's fantastic, it's truly appreciated, it's what we're wanting to do," Trewavas said.
"It's always been a bit of a pipe dream but it's always been in the plans, as you know with $20 million coming in, it relieves the balance sheet elsewhere. We were always going to do that programme of works but now it frees it up to do some other stuff as well.
"Taupō will certainly be a world-class destination to visit, it will set this place up for the future because when the international people come back in, they're going to come back in a rush.
"We look forward to it, we'll be ready for it."