Delay of expected income from Contact ‘bizarre’

ONGOING negotiations with Contact Energy that have left a more than $200,000 gap in Otago Regional Council finances at present represent a ‘‘bizarre’’ and unacceptable situation, a councillor says.

The council’s finance committee heard the Alexandra flood protection scheme’s ‘‘other income’’ remained at $0 nine months into the financial year, compared to the budget position of $224,000, because the council’s agreement with Contact Energy was still being negotiated.

It was not the first time the issue had been raised at the committee and Cr Andrew Noone took issue.

‘‘I’m a bit grumpy about that,’’ Cr Noone said.

‘‘This is no disrespect to the negotiating that’s happening behind the scenes by staff.

‘‘We have had to spend nine months negotiating with Contact Energy, still without a resolution.

‘‘I think it just seems bizarre, unfair, and we wouldn’t allow this to happen with a ratepayer, for example.

‘‘There would be some consequences if you didn’t pay your rates after nine months.

‘‘I’m just saying this is unacceptable.

‘‘I’d like to know what we can do as the governance of the Otago

Regional Council to either crack the whip or rattle the cage in some way shape or form.’’

Cr Kate Wilson also expressed concern with the continued negotiations.

‘‘This is not the first time, or the second, or the third, or the fourth time that this has come up,’’ Cr Wilson said.

At the meeting, council chief financial officer Nick Donnelly said the matter was a ‘‘work in progress’’.

‘‘We’re working as fast as we can on that.’’

After the meeting, Mr Donnelly explained the Alexandra flood scheme was not rate funded, but rather there was a contractual arrangement between the council and Contact Energy — and that contract was still being negotiated with them at present.

As a result, the council had not invoiced Contact Energy for this year and there was a ‘‘variance to budget’’ of $224,000 showing in the council’s statement of comprehensive revenue and expenses, as at the end of March.

‘‘As noted in the meeting yesterday, negotiations are in progress and are expected to be completed before financial year end.

‘‘There is a secondary phase of negotiations to follow, seeking to enter a longerterm agreement with Contact Energy of up to 10 years, by December 2023,’’ Mr Donnelly said.

A Contact Energy spokeswoman referred comment to the council.

❛ I’m just saying this is unacceptable. I’d like to know what we can do as the governance of the Otago Regional Council to either crack the whip or rattle the cage in some way shape or form Andrew Noone