Legal dispute has big role in deficit

DANIEL BIRCHFIELD
Last updated 05:00 21/05/2014

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Legal costs related to the Waimate District Council's dispute with local businessman Keith Williams have contributed significantly to an expected budget deficit of $469,000 at the end of the financial year.

A finance report, prepared by Waimate District Council chief financial officer Graham Durston, outlined some of the reasons for the larger-than-expected deficit.

A lower New Zealand Transport Agency subsidy and a lower Ministry of Health subsidy for the Lower Waihao Water Scheme played a part.

Durston's report to the council at a meeting yesterday said unknown forestry valuations after damage to some of the council's forest areas during a storm on September 10 and flooding in April had also contributed substantially.

Durston said forestry income would be recognised once a final figure was known and the council might receive a maximum insurance payout of $332,492 if proceeds from harvesting the damaged areas were below expectations.

However, water maintenance costs were lower than budgeted ($750,000 against an anticipated $802,000), while the report noted that entering the All of Government electricity contract had saved the council $107,000, a 43 per cent reduction on what had been budgeted.

Legal fees for the nine months ending March 31 were $174,000, against a budget of $36,000, a $138,000 deficit.

Most of this was a result of an appeal going through the High Court and a settlement payout to Waimate businessman Keith Williams.

Williams sought costs and was awarded $80,000 in June in the Timaru District Court and, following a High Court appeal, a further $66,300, after outgoing chief executive Tony Alden was found not to have the power to lay charges against Williams in relation to building compliance issues.

NZTA subsidy income was $282,000 under budget and Durston expected the council would be down $200,000 on capital expenditure by the end of the year.

He said storms in June and September meant council was behind with its work programme and that emergency reinstatement work around the region had attracted a subsidy at a 53 per cent rate, instead of the budgeted 68.8 per cent the council had expected to receive.

Total expenditure is expected to be $90,000 above budget.

The council's roading expenditure for the nine months to March 31 was $1,481,000, against a budget of $1,531,000, a $50,000 surplus.

Consultancy fees came in at $95,000 against a budget of $103,000.

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- The Timaru Herald

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