A review of South Wairarapa's pay-per-loo policy is on hold for a year despite concerns from business owners that the targeted sewage disposal rate is costing them unfairly.
If a property has one or two toilets, owners currently pay $341 per year for sewage disposal, but for the third and every toilet on top of that, an owner pays another $341 per loo.
Martinborough Hotel owner Mike Laven describes the so-called "pan tax" as "totally inequitable".
"It produces an arbitrary result which does not relate water consumed on the property to wastewater produced."
He said larger properties and accommodation providers were subsidising other users of the system by paying excessive charges.
With 25 loos at the Martinborough Hotel and a steady increase in rates over the last few years, Mr Laven said it was becoming unaffordable.
As room usage is down, he said the hotel was using less water and should be charged less accordingly.
South Wairarapa District Council resolved this week to review the policy in the next financial year, but did not make any changes in this year's long-term plan adopted this week.
Mr Laven is asking the council to introduce an interim measure until the review, suggesting a maximum charge, based on around eight loos.
He said he understood that local authorities needed to recover the cost of collecting and treating wastewater, but there was not necessarily a correlation between the number of pans a property had and the wastewater it produced.
"There is no need to talk vaguely about 'peak flows' and rely on this arbitrary flat tax because the council has installed water meters for every property. In theory, it knows how much water each property is consuming.
"If it knows that part of the equation, it should be able to figure out a fair way of charging for putting the wastewater back into the system."
Council corporate support manager Paul Crimp said the pan charges were a standard way of recouping sewage costs, working on the theory that the number of toilets a property had reflected its output.
"In terms of other charging mechanisms, at the end of the day the same amount needs to be collected, so if charges are reduced in one area, they must be increased in another."
Mr Crimp said there was a cost to maintaining systems that could cope with peak flows, and that cost was the same whether or not the system was actually working at capacity. Martinborough Business Association deputy chair Frank Cornelissen, who also runs Martinborough Top 10 Holiday Park, said it was larger accommodation providers who were being affected by the rate.
"It's a bad tax by proxy ... it does become a really significant portion of tax. Are we putting that much more sewage in than the average ratepayer?"
Mr Cornelissen said business owners may look at the economics and opt not to build extra units or rooms because of the rate.
He thought the council had taken on board the feedback and he would be happy to work with it on a review.