The Christchurch City Council has settled its long-awaited Bromley Wastewater Plant insurance claim, although it is not ruling out further odour problems during planned remediation at the site.
Local authorities have confirmed it has received an $85 million insurance settlement, almost three years after a fire destroyed two trickling filters at the plant.
A lingering "unbearable" stench, as a result of the November 2021 fire, left locals in Bromley and neighbouring suburbs battling nausea, headaches, worsening asthma, sleepless nights and deteriorating mental health.
A temporary system was put in place, although this did little to allay the odour.
The problems were on top of existing gripes about a separate odour linked to the nearby organics processing plant.
The filters are set to be replaced over the next three years with an activated sludge reactor system with provisional estimates sitting at $140m.
According to the council, sludge reactors are a prominent treatment process globally and the best wastewater treatment method from a resilience and cost perspective.
During Wednesday's announcement, council chief executive Mary Richardson told media the additional $55m needed for the project was included in council's existing budgets.
"We do have funding in the long term plan," she said.
"There'll be no additional cost on ratepayers.
"We have planned for that cost."
However, leaders and council staff could not guarantee that further odour problems wouldn't persist as the filters were replaced.
Council's head of three waters Gavin Hutchison said it had procedures in place to "minimise the risk of odour".
"The plant is at capacity and we're doing a lot of work to ensure nothing falls over and resolve any odours being created," he said.
"The risk is there and we'll continue to do our best to to ensure that doesn't happen."
Christchurch Mayor Phil Mauger said community leaders owed it to residents to remove what is left of the aged filters and construct a more modern system.
"The trickling filters are 50 years old, and in that time technology has moved forward in leaps and bounds.
"This new activated sludge system will provide us with the opportunity to significantly reduce emissions and has a smaller footprint that can be upsized at a lower cost to accommodate our growing population,"
The insurance settlement was unanimously approved by elected members after delays and "complex negotiations" stalled progress.
Richardson said the insurer was willing to cover the cost for an equivalent filter system replacement.
"We have been very fortunate that we've been able to negotiate with our insurance company to get a cash settlement, which we weren't automatically entitled to, that enabled us to build a far better solution," she said.
A 2022 report by Fire and Emergency investigators revealed the fire most likely started when contractors accidentally ignited maintenance tape or the fibreglass roof of one of the trickling tanks with a heating tool.
Investigators had been unable to determine exactly how the fire broke out because Goleman Group contractors had declined to be interviewed.
Richardson refused to comment on Wednesday when RNZ asked who was ultimately liable for the fire.
"That's something we can't comment on at this stage," she said.
Detailed design on the project is still being finalised with construction slated to begin within the next six months.
The sludge reactor system is expected up and running by late-2027.
An independent report, commissioned by the council last year, showed the council's response was inadequate, particularly how it addressed welfare concerns for affected residents.
Both Mauger and then chief executive Dawn Baxendale apologised over how the event was handled.