Newshub can reveal Hawke's Bay councils have been offered a 50 percent share by the Government to buy out red-zoned homes.
This decision is expected to set a precedent in future buy-out situations, but Napier Mayor Kirsten Wise is disappointed by the offer because it will put an "unfair" amount of cost on ratepayers.
"I just don't think our local community should be paying 50 percent of these property buyout costs. They've been impacted themselves."
Newshub understands the total package is worth $556 million.
Here's a breakdown of how that will be distributed:
- $203.5 million for flood protection
- $260 million for transport
- $92.5 million for property buyouts.
The five councils agreed on the terms, with what's been offered subject to consultation with the region's communities.
Wise told Newshub Napier Council's primary source of revenue is rates, and she fears this will cause an "intergenerational issue".
She said there is "significantly more investment" required, but cannot get it done without Government support.
"At this point in the process, we have indicated to the Government that we do expect further support and we will continue these conversations going forward."
Hastings Mayor Sandra Hazlehurst said the agreement will be welcome news for those in her community devastated by the cyclone.
"Through the negotiating team, Hawke's Bay's councils have been working tirelessly to reach an agreement that enables whānau and communities to stand back up on their feet," Hazlehurst said.
"For those in our community whose properties become finalised as Category 3, having a voluntary buyout process in place empowers people to make informed decisions and provides greater certainty about their future."
Hazlehurst said consultation is expected to begin in the "coming weeks".
"Once that consultation process is complete, we hope to be in a position to share further information on the next steps for the voluntary buyout of residential properties in Category 3 areas directly with impacted property owners."
Hawke's Bay Regional Council chair Hinewai Ormsby said the deal is "significant" but there is still some "hard mahi" ahead.
"As the only region-wide Council we have and will continue to work with the other four Councils to help Hawke's Bay get back on its feet stronger and more resilient against future events," Ormsby said.
"I'm confident, just as we all pulled together in the wake of the cyclone and to get this settlement negotiated for all the people of Hawke's Bay, that we can overcome those challenges and move Hawke's Bay forward, together."
Central Hawke's Bay Mayor Alex Walker said the deal was a "vital puzzle piece" but not one that will fix all of the region's challenges.
"We will continue to look for opportunities to ensure Hawke's Bay builds back stronger, more resilient, and more sustainable than before."
Thursday's announcement comes after the deal was shrouded in secrecy while all councils deliberated over the deal.
It's estimated there are more than 265 red-zoned houses in Hawke's Bay.
What does this mean for other cyclone-hit regions awaiting buyouts?
The deal is likely going to pave the way for other regions. Councils in Tairāwhiti and Auckland are still negotiating deals with the Government and those are expected in the coming weeks.
Cyclone Recovery Minister Grant Robertson said on Tuesday it's taking longer to work through and each region has slightly different issues.
The process of splitting the cost between councils and the Government for weather-related damage and managed retreat from flood-risk areas is really setting the template for what can be expected in future with similar events.
The Government's made it crystal clear that they simply can't afford to cover all the costs.
