A stoush between Hawke's Bay Regional Council and the National Emergency Management Agency (NEMA) over who pays for some Cyclone Gabrielle response and recovery costs could leave ratepayers facing a hefty bill.
A council report revealed it was struggling to get reimbursment for some costs from NEMA, including for emergency infrastructure repairs, helicopters, and generators.
Much of the work happened at haste in the throes of the emergency, without consideration of how it would later be paid for.
If that was not resolved, ratepayers would have to fund the shortfall, it said.
The council estimated it was facing more than $885 million in cyclone response and recovery costs.
It hoped NEMA would cover $56m of that: $45m for rebuilding infrastructure, $6m for emergency infrastructure repairs, and $5m for the Civil Defence response.
Emergency management guidelines state the government should fund 100 percent of welfare response costs, 60 percent of other response costs - for things that would "reduce immediate danger to human life" in an emergency - and 60 percent of recovery costs, like essential infrastructure repairs.
But the report said the council was having "major issues" with reimbursement.
Cost claims declined for helicopters, infrastructure repairs
NEMA rejected a claim for costs to keep helicopters on standby during the emergency, which the report said were "critical" to respond quickly when lives were at risk.
The report said the helicopter operator's lawyers were now involved.
A number of flights ordered by NEMA - for example, for Ministry of Social Development staff to visit their clients - were also being turned down for reimbursement.
"We have attempted the process of recovering these costs from the MSD and as a result we have been met by significant resistance," the report said.
It said Fire and Emergency and NEMA used Cyclone Gabrielle to trial a new way of managing flights. It did not detail what this meant, but said as a result it was "extremely difficult" to reconcile costs.
The council believed the cost of helicopters commissioned by Fire and Emergency should be met by NEMA - and the matter was being discussed "at senior levels" of the agency.
The report showed NEMA also turned down a $3m claim for some of council's emergency infrastructure work, like restoring stopbanks and pump stations, because they were internal council costs that were not eligible for reimbursement.
It said council staff were aware that an unnamed "large supplier" was seeking legal advice because it believed its work relating to Cyclone Gabrielle should be reimbursed by Civil Defence or NEMA - although it noted the work was technically not eligible for reimbursement.
Poor record-keeping by council during emergency response
The report admitted some of the issues with reimbursement were down to council's own poor record-keeping during the emergency response.
It said while staff were aware of the NEMA claims process, it was not considered when initial response costs were incurred - so it was difficult to retrospectively keep tabs on them.
For example, Civil Defence spent a "significant" amount on generators, but did not adequately keep track of how and where they were allocated.
"In some instances generators were allocated to entities who should not have received them," it said - like a $140,000 generator that went to a "critical distribution company" which staff now claim was never used.
It said NEMA would not reimburse costs for setting up generators at rest homes and pharmacies.
"Potentially, with hindsight, the GECC [Group Emergency Coordination Centre] should not have provided these services, but the GECC staff making the decisions at this time were focused on the welfare and medical needs of the citizens of Hawke's Bay rather than who was subsequently going to be paying these costs."
It was not yet clear how these issues would be resolved, but the report will be discussed at a council meeting on Wednesday 31 May.
The report also showed the regional council's emergency management coffers were already $800,000 overdrawn before the cyclone - though it did not explain why.
The shortfall was due to be addressed before the cyclone, it said.