Mayor Clive Geddes has asked the chief executive of the planning authority, Hamish Dobbie, to conduct a business model review and bring a new fee structure proposal to the council.
The Lakes Environmental (LE) fee model review comes after a proposed "fixed charge" fee structure change was rejected by Queenstown Lakes councillors in a 7-6 vote at a meeting in Wanaka on Tuesday.
Mr Dobbie told the Otago Daily Times LE was incurring a debt level of about $1 million a month.
LE has not changed its fees model since 2001.
Currently, more than $250,000 (or 25% of that monthly debt) is attributed to outstanding fee invoices which are more than three months overdue, he said.
LE, which handles resource consent applications and other planning matters for the council, wanted to implement a controversial flat deposit "charge" calculated to be about 80% of its total overall processing charge for an application.
The proposed fixed-rate charge-out scheme would have resulted in an average deposit-fee increase of about 474% for consent applications.
The QLDC has one of the highest per capita figures in New Zealand for resource consent applications, compared with cities such as Auckland, Waitakere, Wellington and Christchurch.
Brown and Pemberton planner Blair Devlin, of Queenstown, said the council's decision to defer the fee changes was appropriate.
LE's "monopoly" meant people could not go elsewhere for planning decisions.
"No other provider of professional services would be able to get away with what LE wanted to do," Mr Devlin said.
Mr Dobbie said LE's monopoly had contributed to a rising level of bad debt, "because we have to accept every resource consent application for processing".
The number of consent applications lodged had dropped 23% in the past 12 months but LE had balanced the drop in income by reducing its fixed costs (by 25%) and cutting back on staff processing costs by 23%.
Consent application processing times had been reduced by 11%, but managing debt remained a major concern, Mr Dobbie said.
At present, a 20% deposit is paid by applicants and then they are billed by LE for processing costs.
LE was not increasing resource consent, planning, or regulatory charges, Mr Dobbie said.
Cr Gillian Macleod, of Queenstown, said there was a "different perception" about what the proposed fixed charge involved.
She was joined by councillors Lyal Cocks, Mel Gazzard, Cath Gilmour, Vanessa Van Uden, and John S Wilson who voted against the proposed charge change.
