The Clutha District Council is staying tight-lipped about legal action to try to recoup some of the nearly $2 million it was ordered to pay a Dunedin businessman.
But in the meantime, the council is preparing to spread some of the cost of the bill across Clutha ratepayers for the next 25 years.
The Otago Daily Times reported in March last year the Building Disputes Tribunal had ordered the council to pay $1.963 million to Dunedin businessman Russell Lund.
Mr Lund’s firm, Lund South, was the company tasked with completing the upgrade of Balclutha’s Centennial Pool for the council.
The upgraded pool opened in 2012, more than eight months late and $3.3 million over its original $1 million budget, but a dispute over defects, delays and disparaging comments has lingered since.
The council, in a statement last March, confirmed it faced the "liability" following a ruling from "an authority", but declined to reveal other details, including the name of the authority and the other party, saying they remained confidential.
It is understood the other party is Mr Lund. The ODT has previously reported he was threatening a "significant" financial claim against the council relating to the pool project’s headaches.
Mr Cadogan said at the time he wanted more "transparency" over the payment, but the council’s hands were tied while legal options were considered.
Council chief executive Steve Hill, asked for an update this week, confirmed some form of legal action had been launched, but details could still not be divulged.
The council had met, confirmed a preferred legal option and initiated it, but he would not say directly whether it was continuing.
That would be decided when councillors considered a report on the issue in the non-public section of the council’s next meeting, on February 22, he said.
In the meantime, councillors had settled on a proposal to split the cost of the bill between the council’s cash reserves and ratepayers, Mr Hill said.
The council made the $1.963million payment last March, initially by dipping into its own reserves.
Mr Hill said councillors, at a long-term plan workshop in November, had settled on a proposal to cover $300,000 of the bill from general reserves, while the rest would be paid by ratepayers in Balclutha and across the wider Clutha district.
The rates portion would be spread over 25 years and add $10.81 a year to the council’s uniform annual general charge, paid by all ratepayers, he said.
The proposal would be included in the council’s next draft long-term plan, which was due to be released for public consultation in April.
Mr Hill again declined to discuss details of the authority’s finding or the other party involved, saying an agreement first had to be reached to release the authority’s finding.
The council wanted the finding made public, and had met the other party to discuss any conditions for doing so, but no agreement had been reached, Mr Hill said.
Mr Lund declined to comment when contacted.
