A possible average district rate rise of 5.5 per cent was tabled at a Thames Coromandel District Council workshop held recently.

Council is dealing with a $31 million debt relating to the Eastern Seaboard Sewerage Schemes which were completed in 2009.

The Thames Coromandel District Council says an average district rate rise of 5.5 per cent is a possibility. Photo: File

The two-day workshop held for elected members was in preparation for council's Draft 2015–2025 Long Term Plan.

The projected 5.5 per cent increase was presented as a first cut to elected members who are wrestling with how to deal with debt from the sewerage schemes and peripheral works.

These plants in Whangamata, Tairua-Pauanui and Whitianga, cost in excess of $93m.

Chief Executive David Hammond says it was the belief of council in the early 2000's that future developers would pay at least 66 per cent of that cost.

'And that growth would take off in the Coromandel at a fast rate,” says David. 'The developers didn't come and instead we were all hit by the recession.”

'Someone has to pick up the mounting unpaid bill and that now amounts to a 3.5 per cent rate rise in itself to deal with this one issue. It should have been addressed in 2008/2009.”

Staff are now looking at ways to lessen the projected rates increase after receiving input from all community boards on priority projects and level of service for each ward over the next ten years.

A final figure on the average district rate will be presented to Council early next year.

Meanwhile council's base position has been helped by its reduction of rates, which hit a remarkable -6 per cent decrease in 2012/2013 from what was charged in 2010/2011.

This has allowed council to have a lower starting base to cope with future pressures and shocks, including dealing with the present debt on the Sewerage plants, says David.

TCDC mayor Glenn Leach says they knew servicing the debt of the Sewerage Plants would be coming and council's been preparing its finances to ensure 'we are in a better shape to face it”.

'We have the responsibility to pick this up and deal with it,” says Glenn. 'We will take this on the chin but also look at how we can be flexible so that at some point in the future when there is growth in some areas, we can review this.”

'Council and staff have done so much work over the last four years to bring out-of-control debt and rates back under strong management.”,"

Glenn says without the sewerage plant issue council would have been on target to deliver a rates rise of less than 2 per cent again.

On top of that council has successfully implemented its Community Empowerment model, returning local decision making back to locals.

They have also been able to make significant reductions in operating expenditure and also reported the best level of customer service ever, says Glenn.

'Now is the time to deal with the Treatment Plants and I'm grateful that we can do it with some confidence.”

The situation with the Tairua-Pauanui, Whangamata and Whitianga Eastern Seaboard Wastewater Plants:

The Three Wastewater Treatment Plants were completed by 2009 to deal with future growth and peak summer population.

Up-to-date modelling and testing shows parts of the Tairua-Pauanui and Whitianga plants are near capacity over peak summer, but fine tuning and some small capital works can both optimise and increase their capacity.

Based on 2015 projections the indication is these plants won't reach capacity within their asset life, so if future population growth doesn't materialise as projected, it means council's Additional Capacity loan isn't repaid.