The Wellington City Council currently disposes of sludge at a landfill. Photo / WCC
The Wellington City Council currently disposes of sludge at a landfill. Photo / WCC
The Wellington City Council has been forced to apologise after a $3.4 million accounting blunder led to all the capital’s ratepayers being undercharged for the city’s sludge levy.
The error has left households facing surprise rates top-ups next year, with the council saying it has to claw back the cost.
Rates bills sent out in August and November this year undercharged ratepayers by an average of $40 on the levy each, ranging from between $3 and $100 undercharged per bill.
Commercial ratepayers have been undercharged between $500 and $5000 each, an average of $1200 per levy payer.
A council spokesman said it legally cannot waive or absorb the cost, and the undercharge will have to be footed by ratepayers in their February and May rates bills next year, so it can be passed on to the sludge facility’s funding entity.
The council’s chief strategy and finance officer, Andrea Reeves, said the error was discovered during a quarterly reporting review and the council “took immediate action” to investigate.
Speaking to media from the council’s headquarters this afternoon, Reeves admitted the embarrassing mistake should never have happened.
“I‘m really apologetic for it, genuinely,” she said.
The mistake happened when the levy was uploaded into the billing system, the council said.
“Some amounts were entered as GST-inclusive instead of GST-exclusive, and an incorrect fixed charge was used.”
It was a case of human error that came about during the data entry stage, Reeves confirmed.
“To prevent this happening again, stronger internal controls have been put in place, including additional review steps.”
Wellington City Council chief financial officer Andrea Reeves.
“This is clearly our error, we’re not going to be charging penalties for this particular component of the bill.”
She said the council looked at all options but ultimately has a legal obligation to claw back the money.
Asked to explain the legal position and why the council could not absorb the sum itself, Reeves said she received legal advice on it but did not have the details to hand and “couldn’t possibly explain it”.
February rates bills will include personalised information about the undercharge, Reeves said.
Mayor Andrew Little said the error was disappointing but he is confident additional checks will be carried out in future.
“The bottom line is this, while I’m the mayor and a mistake is made, council will front up, we will fix it and we will learn from it,” he said.
In 2024, the Wellington City Council added a special sludge levy to rates bills to help fund its first-of-its-kind under-construction sludge minimisation facility.
Sewage sludge is a natural and unavoidable byproduct of treating wastewater.
A render of Wellington City Council's new sludge treatment plant. Image / WCC
The city produces more sludge than it can currently deal with, leading the council to approve the construction of a new sludge minimisation facility at Moa Point near the airport in late 2022.
The facility was initially budgeted to cost $200m, but climbed to $400m by the time it was approved in 2022, before being raised again to a budgeted $428m in June 2023.
The budget blew out again in August this year when councillors were told the cost of the project grew to between $478m and $511m.
Ethan Manera is a Wellington-based journalist covering Wellington issues, local politics and business in the capital. He can be emailed at ethan.manera@nzme.co.nz.
