The allocation was part of the Dunedin City Council’s $11.54m share of Three Waters "Better Off" funding, but the situation has changed since the new government took office.
Discussion is continuing about how some of the $11.54m will be redirected by the council after the government wanted such funding to have clear alignment with Three Waters.
The council put in its application in 2022 and the Otago Daily Times understands councillors were not in the loop about the details until learning more in recent months.
A report by Crown Infrastructure Partners in April this year showed what the intended allocation was.
For the Dunedin City Council, it showed 14 projects, including $1.66m for accelerating zero-carbon city-wide outcomes, $1.45m for a South Dunedin Future climate change adaptation programme, $1.44m for a "city growth team" and $850,000 for enhanced Three Waters hydraulic models.
Also on the list were $810,000 for strategic Treaty advisers and $690,000 for cultural capability advisers.
Councillors have not directly weighed in publicly about whether the makeup of the application was appropriate, but some misgivings about procedure have emerged.
City councillor Sophie Barker said she felt there had been a "step missing" from the council’s process - this being consultation with councillors about the nature of the application before it was sent to the Department of Internal Affairs.
The council "would’ve liked a more robust process" and to have had a better initial understanding of the funding allocation, she said.
Cr Barker said it was "disconcerting" councillors had to dig to find more information from about March.
Deputy mayor Cherry Lucas said she had been surprised by the lack of a report about Better Off funding.
She felt information should have come to the council sooner.
A council spokesman said the funding allocation for strategic Treaty and cultural capability advisers was outdated information.
The council "has spent substantially less in these areas and the balance of these funds have been redirected into Three Waters", he said.
Its initial application was in line with Internal Affairs requirements under the previous government and adjustments were being considered in line with the new government’s water policy.
"The new government has since confirmed unspent funds can be redeployed for Local Water Done Well purposes, and the details of this are being discussed with councillors as a non-public item," the council spokesman said.
"A large portion of the funding is allocated to Three Waters, but there are still decisions to be made by the elected council on the exact allocation."
An Internal Affairs spokesman said councils could redirect funds or change the scope of projects and Dunedin had made a series of changes to its original proposal submitted in September 2022.
These included a request to discontinue one of its 15 projects.
Dunedin Mayor Jules Radich said discussion at the council had been constructive.
"It’s definitely not a rancorous process," he said.
The allocation was still being worked out and he was comfortable with where things stood.
Dunedin Area Citizens Association chairman Lyndon Weggery called on the council to be open about what was happening.
Council chief executive Sandy Graham should be clear about where the money had gone and, if some could not be redirected back to Three Waters, state why this was the case, he said.
Cr Carmen Houlahan said discussing the issue behind closed doors did nobody any favours.
"It should’ve been discussed in public," she said.
