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Spiralling costs for flood protection works at Wanaka's Stoney Creek may mean residents will face a special rate for the work - about four years after they successfully campaigned to have the costs shared.
Severe floods hit the area in 1999 and 2004, leading to a proposal from the Otago Regional Council for a $1.4 million three-stage flood protection plan in 2004-05.
It was decided to go ahead with stage one, which would provide protection for a one-in-50-year event at a cost of $250,000.
To fund it, a special targeted rate was proposed, but after feedback from the community, the council instead reached agreements with the Queenstown Lakes District Council and developer Willowridge Developments for them to pay up to $80,000 each towards the work, with the council funding the rest from proceeds from the Wanaka river management special rating area.
Completing the flood mitigation work was included in the 2009-19 long-term council community plan.
The outstanding work involved mitigating flooding caused by the Hopgood Crossing, channel improvements and debris trapping on the Hopgood property.
It was estimated to cost about $70,000 in 2009-10 and $100,000 in 2010-11.
The council's finance and corporate committee was told this week the council might need to reconsider the funding model if the cost estimates or project scope changed.
Environmental engineering and natural hazards director Dr Gavin Palmer said costs had gone "way beyond" original estimates as more than $400,000 had already been spent on the work.
The work had been held up as the council had been unable to get permission from Studholme Rd property owner Eric Hopgood and his family trust to do the work.
"This is foreshadowing there could be legal processes going forward."
For the scheme to be fully effective, the extra work was required, he said.
"There is still a significant risk."
Chief executive Graeme Martin said it was an "extraordinarily difficult" situation, with uncertainties over legal costs and resource consents.
It was necessary the committee "explicitly foreshadowed" a targeted rate could be needed in the future, he said.
"The longer we procrastinate, the higher the costs go."
Cr David Shepherd said not having a targeted rating district for flood works in Stoney Creek contradicted the stance of other areas with targeted rates for flood protection.
The committee carried a recommendation that any subsequent work be funded by a targeted rate through a special Stoney Creek rating area.