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Environment Minister Nick Smith has written to eight councils - including Waimate and Environment Canterbury - warning an administrator could be sent in to run them if they did not improve their resource consent performance.
Waimate was ranked 40th at 41% while Ecan was ranked 44th and last with 29%.
The Waimate District Council had mistakenly sent incorrect data to the Ministry for the Environment which indicated slow processing times, planning and regulatory manager Brent Donaldson said.
Unlike many councils, Waimate assessed its own processing times by including the time it took for other organisations to comment on consents.
Those organisations, which included regional councils, iwi and occasionally the New Zealand Transport Agency, were given 10 working days to make comments and they could also request more time.
"We don't stop the clock while this is going on. As a result, in our survey it shows that only 10 of the 36 subdivision applications were processed on time.
"But if we'd sent data in which we'd stopped the clock while the other organisations had their 10 working days at least, the council would have processed 31 of the applications on time," Mr Donaldson said.
The recalculation showed the council had processed 71% of its total resource consents on time, not 41%.
During 2007-08, the council had also found itself in an "unprecedented" time of economic growth.
That rapid growth had now slowed and processing times had improved, he said.
Waimate Mayor John Coles said the council was writing to Dr Smith to explain the situation.