The Rotorua Lakes Council has billed the Government $420,000 for a share of the cost to ratepayers for a hearing to decide the future of contracted emergency housing motels.

It is the latest invoice sent to the Ministry of Housing and Urban Development associated with the November and December resource consent hearing over 13 contracted emergency housing motels.

The ministry has not paid the bill and has lodged a formal objection asking for further clarification given the amount.

The council says it billed the ministry $585,000 in total but had previously recieved $165,000 in a deposit and progress payment.

It says it won’t be able to recover a further $680,000 in residual costs relating to the hearing, as well as previous enforcement and regulatory work for emergency housing.

Rotorua mayor Tania Tapsell and Restore Rotorua chairman Trevor Newbrook said the billed costs were fair and it was only right the Government paid, not ratepayers.

Rotorua District Residents and Ratepayers chairman Reynold Macpherson, however, said in his view the council, as an organisation, should have realised there would be costs involved and planned for them.

Reynold Macpherson on Fenton St. Photo / Andrew Warner

Council district development deputy chief executive Jean-Paul Gaston said the council’s policy allowed it to charge up to $45,000 to run a consent. In this case, there were 13 consents.

The costs came from expert reports, summarising submissions and hearing costs, which Gaston described as “significant”.

He said the cost to process the consents was more than the policy allowed and the remaining costs included the cost of council staff and lawyers involved in the hearing.

A ministry spokesperson said it acknowledged there were reasonable costs but, given the amount, it had sought more details and lodged an objection.

“The ministry will pay the final reasonable costs determined in accordance with RMA [Resource Management Act] processes”.

Rotorua mayor Tania Tapsell. Photo / Andrew Warner

Tapsell said the hearings were a significant cost to ratepayers that had not been expected or budgeted for.

“Council has a responsibility to act prudently and I believe given justifiable costs occurred because of Government decisions it is reasonable and fair to ask them to front the costs.”

Tapsell said she acknowledged there had been a significant wider cost to the council and the Rotorua community.

“We’ve had great progress through our Housing Accord with Government and iwi and are focused on reducing the use of motels for emergency housing in Rotorua to near zero.”

Former Rotorua mayor Steve Chadwick said in a letter to Social Development Minister Carmel Sepuloni in February last year the council was being forced to invest more in security, cleaning and maintenance as a result of emergency housing and it was not sustainable.

The Rotorua Daily Post asked Tapsell if it was fair ratepayers should have paid for those costs given a Government report in 2021 showed a third of those in the motels were not from Rotorua.

She said: “[The] council chose to take on costs associated with security, cleaning and maintenance to improve the situation in Rotorua. We cannot change these costs now, however, as mayor of Rotorua it is my focus to ensure we continue to see an immediate delivery of the outcomes of the Housing Accord, including working towards zero emergency housing motels use in Rotorua and removing mixed-use facilities as well.”

Macpherson, a former councillor, said he believed the invoicing confirmed the costs incurred by the council were not budgeted for or agreed to by Government ministers beforehand.

“They also confirm that council expenditure on emergency housing was not authorised by the 2022/23 Annual Plan process.”

He said it was his opinion the council, as an organisation, should have known Restore Rotorua was going to challenge the “agreement” to use Rotorua’s motels and that commissioners would be appointed to review the resource consent applications.

In response, Gaston said a variety of the council’s regulatory functions incurred costs and not all of them were recoverable or able to be predicted.

Gaston said he did not know what agreement Macpherson was referring to but consents were a formal Resource Management Act process and were run under the requirements of that legislation.

”While contingencies are included in annual operational budgets, all eventualities cannot be predicted and our fees and charges policy seeks to recover, as much as is possible, additional costs council may incur, to reduce this burden.”

Restore Rotorua chairman Trevor Newbrook. Photo / Andrew Warner

Newbrook said it was only right the Government should meet the costs for the hearing.

“The council has other cost increases related to emergency housing including security guards, surveillance cameras, monitoring staff, senior management, cleaning and removing shopping trolleys. It seems unfair on ratepayers that on top of the social impacts of so much emergency housing, we also have huge costs to pay. As former mayor Chadwick said last year, it is unsustainable.”

He said the council was now tasked with trying to address the issue of non-contracted motels being used by the Ministry of Social Development for what is commonly referred to as emergency housing “vouchers”, or Emergency Housing Special Needs Grants - something not permitted under the District Plan as motels had to be for short-term visitors only. He said this added yet another cost for ratepayers.

In his view: “It is now time for the Government to stop their illegal operations and find some real solutions to the emergency housing crisis.”

Housing Minister Megan Woods. Photo / Mark Mitchell

In response to Newbrook’s comments, Housing Minister Megan Woods said, in her view: “The false assumption that this Government created Rotorua’s housing problem is not helpful. The problem began long ago when the National government gutted public housing in Rotorua resulting in the loss of 42 public houses, problems that this Labour Government is fixing.”

Woods said it was good news “we are starting to turn the tank around”, with the number of households in emergency housing steadily falling.

“Emergency housing motels are not a long-term solution but a response to a crisis that has been decades in the making.”

The Rotorua Daily Post Weekend reported on Saturday latest Government figures showed the number of households in emergency housing had nearly halved from what it was a year ago.