Kaipara district mayor Neil Tiller has confirmed the small Northland rural district is facing massive rate rises to cope with its debt crisis, saying the council has been forced to resort to borrowing to "pay for its groceries".
A farming leader on Tuesday called for the council to resign, saying its incompetence has caused the council's debt to blow out to $90 million.
Farmers of New Zealand operations director Bill Guest, who took out an advertisement in a local newspaper, says the council is on the verge of bankruptcy.
And a report commissioned by the council has found it illegally levied $9 million worth of sewerage and forestry rates.
Mr Tiller says Kaipara ratepayers can expect rate rises of more than 10%, and he is not ruling out a rise of 20%.
"Council has over the last eight to 10 years deliberately not funded all of the annual costs in infrastructure - water, wastewater, stormwater - and each year they have borrowed to pay for the groceries, if I can used that phrase.
"We now not only have to pay for the groceries each year; we have to start repaying what they have borrowed over the recent years."
He says if the council does not raise the rates, the Government will install a commissioner who will.