Mr Budd said the national organisation held its annual conference in Invercargill last week.
On Saturday, the Otago branch was presented a plaque, a cup and a $500 cheque to go towards team building, Mr Budd said.
It was the first time the Otago branch had won the award, which had been a fixture at the annual event for at least two decades.
The victory was an "absolutely amazing" feeling, Mr Budd said.
There were 10 people on the district council, with a wide variety of experience on motoring and mobility, and it had been a team effort to win, Mr Budd said.
They represented about 40,000 members and were involved in advocacy work, particularly around the Dunedin hospital rebuild and the Shaping Future Dunedin Transport programme.
They were also involved with the Dunedin City Council’s George St redevelopment plans.
Working with partner agencies, including police, and the city and regional councils, was something the branch did well, Mr Budd said.
The runner-up spot went to Northland.
Otago’s cadet scheme had helped push them over the line to clinch victory, Mr Budd believed.
"Ever since I took over as chair, I always wanted to get the younger voice heard ...
"The young people have issues with mobility, getting around the city and driving, [so] it’s good to get their perspective on it," Mr Budd said.
Other districts had followed their lead by adding cadet members to their councils.
The AA was a large organisation, with 18 district councils and 2million members nationwide, Mr Budd said.
