"We are not removing it as part of this work, but suggest that part of it be removed when Hundertwasser work begins."
He said gas and telecommunication lines may also need to be re-routed at the site and these are being investigated by the Hundertwasser team.
The work had prompted questions by the public as to how it fitted with the promise for no more ratepayer dollars for the Hundertwasser Arts and Wairau Maori Art Centre (HWMAC).
In 2008, ratepayers were told they would not pay a cent towards the project, then in 2011 previous chief executive Mark Simpson explained "no ratepayer funding" was no longer possible.
Mr Forlong said ratepayers already pay for pipe work and systems to be upgraded, moved, maintained and replaced when required.
He said the sewer is old - it was built in 1956 - earthenware, in poor condition and needed replacement.
"Council's sewerage network and the HWMAC project benefit from this work. The plan is to share the costs fairly between those."
He said the old harbour board building is being dismantled and some of it will be returned for reuse in the final build, which is at the cost of the Hundertwasser project.
"The cost of carparking alterations, footpaths, signage will depend on whether the work is council land or land council has leased to HWMAC project. Where it is HWMAC, it will pay, where it is council, council will pay."
He said the disconnection of existing power, reconnection of power, water supply, sewerage connection, removal of rubbish and debris are costs to HWMAC.
Mr Forlong said the council had committed $2.9 million towards the project as part of the 2015-2025 Long Term Plan.
The initial proposal showed this funding is for the project's team to use for capital works, and the agreement to lease states all the conditions will be met if the funding raised - including the council's $2,977,000 - meets the actual cost of construction.
Mr Furlong said the council reserves the right to consider the work on the sewer line part of the $2.9m, but no decisions have been made yet.
He said public money has been committed by government agencies, lotteries and other funding organisations and donations.
"It will be operated by a trust, and that trust (Whangarei Art Museum Trust) does receive funding from council. The building is on public land and there are services in the vicinity that serve the public."
"As with any development with the district, there will be costs that the council will incur that will not be recoverable from the development."
He said the approach to this project is consistent with its approach to other community assets provided by trusts, such as the Toll Stadium and Camera Obscura projects.