Otago Regional Council $952,000 over budget in legal fees

Otago Regional Council spent nearly $1 million more than expected on legal fees last year. Photo/ODT

Otago Regional Council spent almost $1 million more than expected on legal fees last year.

Acting chief executive Dr Pim Borren said yesterday the higher-than-expected legal costs were primarily associated with reviews of the council’s regional policy statement “and other environmental legal challenges”.

The board budgeted legal fees of $1,240,000 for the 2021-22 year, but actual expenses were $952,000 above that, according to a recent report to the board’s finance committee.

Among the unbudgeted legal fees was $277,000 related to lawsuits.

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

Additionally, “unbudgeted investigations” cost the council $216,000 after the Clutha River spill scandal plagued the council during the year.

As advisers discussed the difference between what was spent on legal fees and what had been budgeted, outgoing CR Hilary Calvert said there was money spent each year that was now “expected” even though it was unclear what it was specifically going to be spent on.

“Every year we spend several million dollars on ‘legal and other things’ and we never assess that,” Cr Calvert said.

In order to balance the budget next year, she asked Dr. Borren to review the scoring of what she said was a chronic overrun of legal and other fees.

“I’ll find out,” he said at the meeting.

Yesterday Dr Borren said he agreed with Cr Calvert’s assessment.

However, he gave no indication that the board planned to raise rates to account for overspending on legal fees.

Instead, he said the council’s financial “underperformance” last year was due to lower-than-expected revenue instead of overspending.

“This involved several areas of our business that did not generate budgeted revenue, particularly public transport, for a range of reasons mostly beyond our control,” Dr Borren said.

He said the higher-than-expected legal costs were primarily associated with the council’s regional statement reviews and other environmental legal challenges.

“We work hard to ensure that our services across ORC are fit for purpose and meet the needs of our communities across Otago.

“At the end of the day, if people want better services, they will have to pay for them either through user fees or tariffs.

“However, we are also keenly aware that we have increased rates significantly over the past two years in an effort to address these same concerns.”

Elna M. Lemons