Angry ratepayers of Mangawhai are refusing to pay new Kaipara District Council rates - despite the Government bringing in financial minders and the Auditor-General probing debt blow-outs for the beach resort's sewerage scheme.

After 530 people attended a public meeting on Sunday to hear the audit office team's plans, Mangawhai Residents & Ratepayers Association chairman Bruce Rogan said analysis of what happened would not cure the rates worries.

Ratepayers rejected a proposed 31 per cent average rates rise to tackle an $80 million debt. They had no guarantee the council would be able to strike an acceptable compromise at its long-term budget plan meeting tomorrow.

"Council will have to go through receivership or bankruptcy to get rid of this debt," said Mr Rogan. "It's unsustainable and there is no way it can get the rates to pay its way out."


He is one of 2100 ratepayers in the Northland resort and he said his yearly rates were bound to rise from $4200 to $6700.

"There will be civil disobedience on a big scale - I would say 500 will not pay the new rate and they won't."

A spokesman for the Office of the Auditor-General said yesterday that the inquiry team would go to Mangawhai to hear the views of home owners who made appointments on July 12, 13 and 14. The team might set up appointments for holiday home owners who lived in Auckland if there was a demand.

The office promised independent scrutiny of the role played by members of its business arm, Audit New Zealand, in vetting the council's annual reports and plans. The town's sewerage scheme costs rose from $36 million in 2006 to $60 million.

The council has several options before it to ease the rates increases over the next decade. It will not decide the rate until it has been discussed with a government-appointed review team comprising Northland businessman Greg Gent, former Manukau City chief executive Leigh Auton and former New Plymouth Mayor Peter Tennant.

The council has the highest net debt per head of the country's 67 territorial councils.