A $150,000 legal bill will not have a direct impact on rates, the Waimate District Council says.
The bill, incurred in a long-running building permit dispute, has been paid out of retained earnings, financial officer Graham Durston said.
The legal bill adds to a recorded deficit of $754,000 for the six months to December. The budgeted deficit was $380,000, but at December 31 it was worse off by another $374,000.
Mr Durston said the additional deficit was due to legal fees and storm damage to forests.
"The legal fees will be paid out of retained earnings; it's previous surplus that has been generated from council activities."
Storm damage to forests had also contributed, Mr Durston said. "I'm looking at asset revaluations."
There was also an expectation of low harvesting of forestry for the year, he said.
"The real recovery rate we will get out of the forestry is dependent on the damage to the trees. There is an insurance claim lodged where we could receive up to a maximum of $342,733 if proceeds from the damaged areas are below expectations."
It was an expectation that the forests would have suffered and the valuation was not as high as expected, he said. "There will be no impact on rates."
The council had budgeted to lose $380,000 because of unfunded depreciation that revolved around roading, Mr Durston said. "We are funding for our capital spend rather than our depreciation."
Waimate councillor Peter McIlraith said it was concerning to see a 100 per cent variation against budget.
Mayor Craig Rowley did not comment on the matter.
A breakdown of financial performance for the six months showed $152,000 in legal fees against budgeted expenditure of $31,000.
Emergency reinstatement expenditure of $194,000 for roading was incurred for the June storm and September wind, with spending for the period at $1.128 million against a budgeted $964,000.
Mr Durston said roading expenditure, including emergency reinstatement, would be fully spent by year end, and be about $20,000 over budget.
The NZ Transport Agency subsidy was below the year-to-date budget by $134,000 because the capital programme had reduced during November and December.
Total spending, including the emergency reinstatement, was expected to be just above budget at year end, which would mean the council would be about $10,000 ahead of budget for NZ Transport Agency subsidy income, he said.
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