The toilets would be accessed by a boardwalk.
But, at a meeting of the council's infrastructure services committee on Monday councillors were surprised to see a fee of $30,000 included in a report for detailed design work for the toilets.
Councillor Mike McVicker said staff had got ahead of themselves and did not give councillors an opportunity to say "yes or no" and had expected they were going to come back to councillors with a further report.
Councillor Julie Calnan also questioned the overall cost for the detailed design, saying she thought $30,000 was a lot to pay, even though they were "rather flash".
Council chief executive Peter Guerin said staff felt councillors had given tacit approval to the project and that staff "had just got on with the job".
However, Mr Guerin said he could not give the exact amount spent on the project so far as the person responsible for the work was away sick.
"But it's certainly nowhere near $30,000.
"Rotorua does not have a destination toilet in town. All major tourist destinations have high quality services that people would pay for."