It brought the final per-property contribution of Tarawera households down from $46,705 under a now-revoked May council decision, to $36,600 – payable over 25 years.

Members of the Tarawera community were present at the meeting when the new cost was confirmed.

There was applause as staff explained their recommendation to accept the external funding and reduce the connection cost, and again when it was voted through.

The meeting was told only 104 properties, out of 450, had committed to connecting to the scheme in stage two, with the low uptake putting the scheme’s delivery at risk.

The Rotorua Daily Post previously reported the Lake Tarawera Sewerage Working Group had encouraged members not to agree to work on their properties until the connection cost was reduced to $36,000. Some locals wanted it lower still.

Rotorua Mayor Tania Tapsell acknowledged cost uncertainty had been stressful for the Tarawera community and thanked them for their “heartfelt” submissions during the recent Annual Plan process.

“Lake Tarawera was significant to our local community, iwi and New Zealand and council had been doing all it could to keep the cost to Tarawera ratepayers as low as possible, balanced with the need to also not overburden the wider community,” she said.

She said the agreement was “a win for Tarawera” and for water quality, with the new funding ensuring it would “remain affordable to local ratepayers”.

The scheme would replace lake-polluting septic tanks with a connection to the city’s reticulated sewerage network.

The first stage of construction – the mains pipeline – was finished in May after delays linked to protests at Lake Rotokākahi.

The decision assumed all eligible properties would connect to the scheme in stage two and a council statement said it hoped all property owners would co-operatively join.

Property owners who opted out must notify the council in writing by July 31. They would be required to connect at their own cost at a later date, with timing depending on what system they had on their property. They would still pay a share of stage one costs.

The cost of stages one and two was expected to be $30,640,600.

That was down from a previous $32.3m, after the council agreed in May to exclude and absorb some costs related to protest delays, a council spokeswoman said.

In a press release, Rotorua MP Todd McClay said the scheme had faced delays and funding uncertainty, however, the funding announcement meant the project could be completed.

“This is an important decision for the Tarawera community and our drive for enhanced lake water quality and the protection of public health,” he said.

Regional council chairman Doug Leeder said the lake water quality and community health were its priorities.

“This agreement between the three parties means that the project can finally deliver on these priorities.

“I want to acknowledge that this has not been easy for Tarawera residents. This agreement is an important step forward and shows that when local, regional and central government work together we can drive better outcomes for our community,” Leeder said.

In May, the regional council turned down Tapsell’s request for an extra $3.5m for the scheme, offering a conditional loan instead.

The scheme, which dates back to 2017/18, was in part prompted by a need to comply with a new regional council rule.