Legal costs up 33% – Watercare’s broken promise

by Cameron Brewer
Aucklanders will be unimpressed that Watercare’s external spend on lawyers has risen by nearly $1m in the last year alone. Official information from Watercare shows a rise in legal costs from $2,679,809 in the year to November 2011 compared with $3,584,204 in the year to November 2012, excluding any in-house legal staff costs.

That’s an increase of 33.7% or nearly $1m in just 12 months. What’s more, Watercare used 22 different legal firms in the past year, and has spent on average about $10,000 a day on legal bills alone.

Yes Watercare is a huge business and is undergoing a massive capital works programme but these numbers are far too high for a ratepayer-owned business.

This is yet another example of rising costs in Auckland local government. We’re seeing it too often at Auckland Council. Mayor Len Brown needs to gain greater control of these council-controlled organisations. At the moment they’re spending up a storm, with little political and public accountability.

It is an outrage it takes a councillor to lodge an request under the Local Government Official Information And Meetings Act to force this out into the daylight but the public needs to know. We’ve got council elections this year and rising costs will be a big part of the debate.

This revelation comes at a time when public submissions are open on Watercare’s proposals for its non-domestic wastewater tariff structure, with submissions closing next Friday on 18 January.

Businesses need to make sure they have their say on these new wastewater pricing proposals.

Alarmingly, the biggest losers look set to be many of the same businesses whose property rates have just gone up the most – that is small businesses such as retailers who are light water users in the old Auckland City Council area. They are ones who will soon be paying more for wastewater and they won’t be impressed to read about Watercare’s latest legal bill blow-out.

Watercare is statutorily not allowed to make a profit and recovers its costs through its charges to residents and businesses. Here is an example of its costs getting too high, costs that will sadly be passed directly onto the water users of Auckland. For the sake of people’s future water bills, these costs now need to be contained.

Watercare’s own vision is about ‘ensuring costs are well managed’. A rise in external legal costs of over 33% in 12 months is sadly a broken promise to all the people of Auckland who own Watercare.

Cameron Brewer is an Auckland councillor

 

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