Bay of Plenty regional ratepayers are set to fund a $3.58 million loan towards Rotorua’s controversial Tarawera Sewerage Scheme.
The decision comes as Rotorua Lakes Council prepares to deliberate today on how to split costs of the $32.3m scheme between general Rotorua ratepayers, Tarawera property owners and other funders.
Tarawerahouseholds currently face a lump sum cost of $50,315 each to connect to the reticulation scheme, which replaces septic tanks.
The cost would rise to $55,601 for those who do not agree to on-site work on their properties by June 1.
The decision followed an initial discussion held in a public-excluded session.
Conditions of the four-year loan included repayment at 25% per year, and removing interest charges after 85% of households connected to the scheme. Until then, interest would be charged at 4.25% per year.
A report in the meeting’s agenda said the loan would not necessarily reduce Lake Tarawera residents’ lump sum contribution, but could “give RLC an opportunity to reduce its interest costs and the targeted rate payable”.
Making the loan interest-free would result in BOPRC forgoing about $150,000 per annum, or about $1.30 per ratepayer.
Regional councillor Kevin Winters said the decision showed the council was helping Tarawera residents, while also signalling it wanted them to sign off work on their properties so stage two of the scheme could be implemented “en masse”.
He acknowledged it was not a grant as had been requested by RLC.
BOPRC’s chief executive could potentially further negotiate conditions, such as capping Tarawera households’ costs.
Councillor Jane Nees supported this cap being the $36,600 some Tarawera residents sought.
Councillor Lyall Thurston said BOPRC wanted to see “some finality to this ongoing saga at Tarawera”, and hoped the decision would be well received by RLC.
Bay of Plenty Regional councillor Lyall Thurston at a May meeting. Photo / Laura Smith
He said he understood some colleagues held concerns and apprehensions.
Councillor Ken Shirley said spreading the cost among regional ratepayers was a “slippery slope” in what other councils might expect in future, but he believed schemes should be considered on their own merits.
The regional council also voted to have an independent review of the scheme funding and project management completed by the councils prior to loan drawdown.
It came after Tarawera resident Tracey McLeod raised potential issues with the stated costs and funding of this and other sewerage schemes.
She presented at a prior regional council meeting and emailed both councils the results of her investigation on Friday.
Thurston said in Monday’s meeting that McLeod had gone to “great lengths to emphasise that costs have been overstated in the scheme” and there were calls for an inquiry and audit.
He believed there could be pushback from both councils on that, but believed some of the “figures bandied around need to be analysed very closely”.
“I’m starting to get totally confused with the size and the quantum of the figures that members of the community say are grossly inflated, overstated and quite frankly, I want to know what the real story is.”
He said the figures in question had been circulating in the public domain for a long time and needed to be challenged, acknowledged and this issue “put to rest once and for all“.
BOPRC chairman Doug Leeder agreed some “forensic analysis” was needed to either validate or reject what was claimed.
RLC infrastructure and assets group manager Stavros Michael told Local Democracy Reporting the council was aware BOPRC was working on a response to McLeod’s claims about the Rotorua Te Arawa Lakes programmes deed funding, which BOPRC administered.
He said the Tarawera Sewerage Scheme is not part of those programmes and had its own funding plan.
RLC would be considering the scheme’s costs and funding as part of the 2025/26 Annual Plan.
RLC councillors will meet today to begin Annual Plan deliberations.
Funding options for Tarawera the council consulted the community about included retaining the status quo, or reducing Tarawera households’ contribution by $1m or $4m and splitting it among general Rotorua ratepayers instead.
Of 344 public submissions on the matter, 232 wanted the $4m taken off Tarawera households.
Laura Smith is a Local Democracy Reporting journalist based at the Rotorua Daily Post. She previously reported general news for the Otago Daily Times and Southland Express, and has been a journalist since 2019.
- LDR is local body journalism co-funded by RNZ and NZ On Air.
