Mayor Rachel Reese. Photo: File.

Mayor defends $3 million overspend


Nelson City Council has done a “pretty good job” on managing its civil infrastructure projects despite an almost $3 million overspend in the last five years, according to Nelson Mayor Rachel Reese.

The council’s infrastructure projects have come under fire recently for budget blowouts and running over schedule on timeframes. After Stoke’s Greenmeadows Centre resulted in a $1 million overspend, the Nelson Weekly requested details of all major infrastructure projects that had an initial budget of more than $1 million that either went over budget or weren’t completed in the expected time frames.

Figures were released under the Official Information Act revealing that of the 15 major works over the past five years, almost half were over budget and another half weren’t completed on time. The total overspend came to $2.7 million.

In some cases, overspends and time extensions were listed as “council approved scope changes” or “unforeseen circumstances”.

However, Mayor Rachel Reese says that the civil team does a “pretty good job”.

“We have a great relationship with local civil contractors to deliver the best that we can for Nelson and the region.”

She says council goes through a rigorous external tender process for all major projects and eventually accepts a contract and price from the selected contractor.

Rachel says that often the budget blowouts are due to controlled scope changes and that overspend of $2.7million was minimal, considering a lot of it was pre-approved.

“Often, you’re looking at a civil project and say ‘ok while we’re there we’re going to do the storm water and other services’ but then find there’s other factors underneath such as ground contamination that you just can’t predict.”

She also says that there are things that can put pressure on the system such as the Kaikoura earthquake.

“If you have something that has to be done in a timely manner you have to pay a premium to get it done and sometimes this can’t be factored into budgets.”

Rachel does acknowledge that buildings are an area where council has less experience.

“Our chief executive Pat Dougherty has given us feedback that we haven’t had enough contingency built into our contracts and budgets so that’s something we are working on.
“Where it’s one off stuff like the Trafalgar Centre, Greenmeadows and School of Music, it will be a lot harder but there will be provisions within those contracts for variations.”

Rachel says that when staff enter into a contract with a preferred tenderer she expects them to be able to deliver a quality product to reasonable expectations.

“Where they are things that you cannot foresee, what do we do? You have to accept that there will be some risk.

“If there are things that someone should’ve foreseen then as elected members we’re entitled to express the fact that we’re not happy.”