The Office of the Auditor-general has cleared two Dunedin
city councillors to take part in deliberations over a proposed
$400,000 events attraction fund.
Questions emerged last month after Crs Richard Thomson and
Kate Wilson voted to include the proposed annual fund in the
council's draft budget for 2013-14, despite running
businesses that could benefit from major events.
Both argued in favour of the fund at the time by referring to
the boost their own businesses had received when Dunedin
hosted thousands of out-of-town visitors for the Sir Elton
John concert in November 2011.
Cr Thomson owns a chain of retail stores, including one in
Dunedin, while Cr Wilson runs a cafe in Middlemarch.
Critics had suggested both councillors should have withdrawn
from the debate and vote because they had a pecuniary
interest in the creation of the fund - a claim rejected at
the time by the councillors and council staff.
Yesterday, the council released a OAG letter which backed
the councillors' right to participate.
The letter from assistant Auditor-general Nicola White, dated
February 12, confirmed several complaints about the
councillors' involvement in last month's debate and vote had
Both councillors had declared their interests while
participating in the vote to include the fund in the draft
budget, she noted.
However, the budget was yet to go through public
consultation, and no final decisions had yet been made,
meaning the councillors ''could not have a reasonable
expectation of loss or gain of money at that stage'', she
The Local Authorities (Members' Interests) Act 1968 prohibits
councillors from participating in debates or votes when they
have a direct or indirect pecuniary interest, other than an
interest in common with the public.
The ''in common with the public'' exception allowed
councillors to participate, but applied when the impact on
the councillors, and the public, had ''some similarity''.
''However, you do not need to be affected to exactly the same
extent as other members of the public - there can be some
variation in the degree to which you and other members of the
public are affected,'' she wrote.
''It is sufficient that you are part of a large group of
people affected in a similar way.''
The two councillors were among ''a large group of people who
derived an economic benefit'' from Sir Elton's concert, as
such benefits ''ripple out'' to other people and provide both
direct and indirect benefits, she wrote.
That meant the councillors could be seen as part of a wider
group defined as ''the public'' under the Act, justifying an
exception for the pair, she wrote.
''On these grounds it is our view that they are not
prohibited from participating in the decisions or voting on
the creation of an events attraction fund.''