The ratepayer considered the rainbow "offensive" and demanded it be "removed immediately".
"To us a rainbow is a promise from God, way back in Genesis that he would never flood the Earth again," they wrote.
The councillor shared his response, in which he explained to the concerned ratepayer that the steps have been temporarily painted in rainbow colours "to show our support for our rainbow community during the Wellington Pride Festival which is currently taking place".
"I'm not sure in which grounds you find this offensive but to me I think it's a beautiful way to show our support for those in our city who are members of the rainbow community," Bentley added.
"Diversity is something we are proud of at Upper Hutt City Council."
Bentley then offered to refund the offended ratepayer.
"If your concern is the cost of these steps being painted then I can advise you that the cost works out at roughly 5 cents per ratepayer. If you would like this returned to you then forward me your mailing address and I'll send you a 10 cent coin to compensate."
He also suggested the ratepayer, who mentioned their offence was based on religious grounds, should take advice from the Bible itself and remember to "love thy neighbour".
Bentley closed off his reponse by wishing the person a "happy pride month".
The exchange went viral on Twitter, with people applauding the way the councillor handled the complaint.
"Thank you Dylan. Great work. Amazing reply. I haven't seen the steps, but they sound great," Auckland Councillor for the North Shore Richard Hills said.
"Love your work, Dylan," Max Tweedie, director of Auckland Pride, replied.
"I would not normally reply to bluntly to a ratepayer but it really irritated me the way they approached the situation," Bentley told the Herald.
He says feedback for the rainbow steps so far has been overwhelmingly positive and he is encouraged by the people's positive reaction.
"Most people are really positive but then some just like to complain," he added.
Bentley said he has an envelope and a ten-cent coin set aside for the ratepayer but, so far, has not heard back.