The council sat as a hearings panel in Queenstown on Thursday, intending to hear a submission from former CivicCorp owner Rene Kampman, who sold the company to the council for about $3 million in 2007, but opposes a proposal to change fees, deposits and charge-out rates.
CivicCorp was founded in 1997 to provide the council's resource management and regulatory services, with the council its only client. Mr Kampman sold the business 15 months before the company's contract with the council ended.
At Thursday's hearing, council corporate and regulatory services general manager, Roger Taylor, said the $3 million loan to buy the company was made up of two components.
"One was the expected profit that the company would have made in the 15 months remaining on the contract it had with the council."
Mr Kampman was one of just two people who submitted on Lakes Environmental's proposal to change fees, deposits and charge-out rates.
He wanted to be heard on the matter, but was unavailable to attend Thursday's meeting.
Lakes Environmental chief executive Hamish Dobbie told the council the "profit" was before debt was paid down.
"One of the uses [of profit] is paying down debt. We had a debt of around $3 million. We have paid it down to around $2.3 million. Each year we try and pay down a little bit of debt ... out of profit ... Over the first three years of our operations ... our total profit was around zero."
Mr Dobbie said the repayment of debt was coming from cash reserves, however "that's not sustainable".
When Lakes Environmental first took over the business, deposit and hourly-rate charges went down but, when asked by Ms van Uden, Mr Dobbie said the company was now "on par or over" the previous hourly rate charged by CivicCorp.
Ms van Uden said her concern was "with the surplus".
"My ongoing concern has been we paid the money because of an anticipated level of profit ... Now we're getting to a point where we're having to put the fees up to maintain a zero surplus, and I have a discomfort with how that has come about."
Mr Dobbie said since Lakes Environmental had taken over, the number of resource consents issued within the 20-day statutory timeframe had increased from 45% to 96.6%, while the number of building consents issued within the 10-day statutory timeframe had gone from 40% to 99%.
"We've got staff doing the right job at the right time [and] we've got more experienced staff ... they cost more."
Additionally, over the past 18 months Lakes Environmental had been working to complete building consents, reducing outstanding consents from 7000 to about 3200.
Clearing that backlog had freed up some cash reserve, but central government-imposed regulatory requirements had brought additional costs to the business.
