Otago council goes $952k over budget on legal fees

7:17 am on 6 September 2022

By Hamish MacLean of Otago Daily Times

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Among the unbudgeted legal expenses was $277,000 in legal expenses related to prosecutions. Photo: RNZ / Ian Telfer

The Otago Regional Council spent nearly $1 million more than planned on legal fees last year.

Interim chief executive Dr Pim Borren said yesterday the higher-than-budgeted legal costs were mostly associated with reviews about the council's regional policy statement "and other environmental court challenges".

The council budgeted for legal expenses of $1,240,000 in the 2021-22 year but the actual expenses came out $952,000 above that, a recent report to the council's finance committee said.

Among the unbudgeted legal expenses was $277,000 in legal expenses related to prosecutions.

There was also an added $210,000 in legal costs related to the council's regional policy statement after the council was challenged in the High Court when concerns were raised about its attempt to fast-track the planning document.

Additionally, "non-budgeted investigations" cost the council $216,000 after the Clutha River dumping scandal hounded the council over the year.

As councillors discussed the difference between what was spent on legal fees and what had been budgeted, outgoing councillor Hilary Calvert said there was money spent every year that was now "expected" even if it was unknown what it was specifically going to be spent on.

"Each year we spend several million dollars on 'legals and things' and never do we rate for it," Calvert said.

In order to balance the budget next year, she asked Borren to look into rating for what she characterised as chronic overspending on legal and other expenses.

"I'll look into it," he said at the meeting.

On Monday 5 September, Borren said he agreed with Calvert's assessment.

However, he gave no indication the council planned to increase rates to account for overspending on legal fees.

Instead, he said in the past year the council's financial "under-performance" was due to lower than forecast revenues instead of overspending.

"This related to several areas of our business which did not bring in the budgeted revenues; especially public transport, for a range of reasons mostly outside of our control," Borren said.

He said the higher than budgeted legal costs were mostly associated with reviews around the council's regional statement and other environmental court challenges.

"We are working hard on ensuring that our services across ORC are fit for purpose and meeting the needs of our communities across Otago.

"Ultimately, if people want better services they will need to pay for them either through user charges or through rates.

"However, we are also acutely aware that we have increased rates significantly over the past two years with a view to addressing these very concerns."

*This story was first published on the Otago Daily Times website.

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