Crs Kate Wilson and Teresa Stevenson told the Otago Daily Times the process by which Dunedin Venues Management Ltd's (DVML) budget was approved during last week's 2010-11 annual plan deliberations was flawed.
Councillors voted to approve the budget after being presented with a staff report detailing DVML's budget needs, and how the extra money would be financed.
However, Cr Wilson said the report lacked alternative options for councillors' consideration, and contained recommendations that left little room for wider debate on the merits of DVML's budget compared with other possible uses of the money.
"I think the process was completely wrong," she said.
"It's not always that the reports would necessarily come in with a whole lot of different options.
"She [Cr Wilson] is entitled to her view. I respect her view. I don't agree with her view."
The Local Government Act 2002 required local authorities to "identify all practical options", and the benefits and costs of each, relating to a decision to be made.
However, it also gave local authorities discretion when determining the extent to which options were identified and assessed, the benefits and costs quantified and the detail of information presented.
Councillors debated aspects of the proposed DVML budget during last week's meeting, during which Cr Stevenson first suggested the report breached the Act.
Cr Wilson complained the report appeared to "pre-determine" what councillors should decide.
The report, by council finance and corporate support general manager Athol Stephens, calculated DVML's budget needs and identified four sources of funding.
Those sources were the $600,000 already earmarked for DVML in the council's budget; $850,000 to be transferred from the Carisbrook Stadium Trust's budget; an unbudgeted $672,000 subvention receipt from the sale of council tax losses from Aurora Energy; and the $264,000 dividend paid by Dunedin City Holdings Ltd from the sale of carbon credits.
Cr Wilson said she was not criticising council staff, but was "frustrated" by a process that appeared to lack transparency and openness.
Other council departments were not invited to make cases for additional funding, and the broader issue - whether there were better uses for the money - was not raised in the report and "barely discussed" by councillors, she said.
Asked if the process complied with the Act, she said: "I don't see how it could comply with anything."
She also believed the process did not comply with the Local Government Official Information and Meetings Act 1987, which required "open and transparent" reports, but would not take the matter further.
"All it does is it reflects my frustration. I don't believe we always, as councillors, are rugged enough in how we receive reports and deal with issues.
"It's a sad indictment of how we want to govern as a council. . . Too often we are just rubber-stamping what council staff think we need.
"We are not asking for that level of information. I think it shows a level of ineptitude on the part of governance."
Cr Stevenson agreed, saying there was "most definitely" a requirement to look at all options under the 2002 Act.
"It's carbon credit money [approved for DVML] - that was special.
"Wouldn't it be nice to all have a say on it?"
Mr Chin acknowledged a "significant minority" of councillors believed the funding should have been used to reduce the 5.2% rates increase forecast for 2010-11, and DVML's budget then considered from general rates.
However, that assumed the funding would have been available to reduce rates without DVML's request, he said.
The report was a response by council staff to the request by DVML staff for additional funding, and sought to identify the best way to fund the request while minimising the impact on rates, Mr Chin believed.
"The reality is the majority of councillors accepted the paper that was there," he said.
The DVML budget was among elements of the 2010-11 annual plan approved by councillors as a draft for public consultation, with hearings to be held in May.
