Council spending review high cost

Proposals to review the delegations manual that details who within the Palmerston North City Council has power to spend money and make decisions have hit a $400,000 snag.

The prospect of a review arose a month ago when the council's audit and risk committee wanted to change some rules to enable senior staff to settle claims.

Councillors were concerned the manual was not up to date, and had not captured policy changes made by the council and the impact of some law changes.

Deputy mayor Jim Jefferies said councillors had not understood the implications of the review, and the $400,000 cost estimate had "hit us between the eyes".

"We need to have another look at this and see if we really need to spend so much."

Business development manager Fiona Dredge told yesterday's committee meeting the project would be too big for current staff to handle, and at least another employee would be needed.

The first task would be to review all council and committee minutes for the past 25 years to gather a list of decisions that made, changed or revoked council policies.

It would take four to six months and the likely cost would be $40,000.

The second and more substantial part of the full review would be a section-by-section check of the manual in light of council decisions, bylaws, central government legislation and regulations.

Chief financial officer Grant Elliott said it was possible the council could hire someone with appropriate legal knowledge to do the review for about $200,000.

However, if the council had to get a legal firm to take on the project, at $120 an hour for up to 18 months, it could cost $375,000.

"I don't think any of us had any inkling it could cost this amount," Cr Chris Teo-Sherrell said.

He said it was hard to imagine that the risks involved in having any outdated delegations justified the cost of finding them.

Finance and performance committee chairwoman Susan Baty, however, wanted the review to go ahead.

She said she did not know what risks the council was exposed to.

"I don't want to find there is some policy not in place, and then we are up in court, and our reputation and our brand is at risk."

While Elliott urged the council to ensure it was acting 110 per cent correctly, Teo-Sherrell suggested 99 per cent might be tolerable so long as councillors understood the consequences of small oversights.

Jefferies said it was not necessary to look "under every stone" in search of problems that might be there, but rather to identify the things it was critical to get right.

The committee has asked staff for a report about the nature and magnitude of such risks.

Manawatu Standard