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At an additional meeting yesterday, councillors voted to assist those experiencing financial and emotional hardship in the wake of any emergency.
Destruction from the Lake Ohau fire underlined the need for the fund, which accepted donations from people and organisations offering support.
The money would be administered by a committee, including Mayor Gary Kircher, a councillor or community board member, and Civil Defence Emergency Management personnel.
Cr Jim Hopkins argued it should be solely decided by Mr Kircher.
"A mayoral relief fund should say exactly what it does on the tin — it’s yours."
Cr Kelli Milmine was worried the committee was too small, saying each event’s needs were different.
"There’s a very small group setting the parameters of how the fund could be used ... depending on the event, maybe a larger group could set some parameters of use of the fund, to make sure it reaches the greater number of people more fairly."
The mayor said the decision would not rest with one person.
"It could cause controversy if it was deemed the wrong decision was made, and a committee ensured it was transparent and mitigated risk," he said.
"It’s three people making the decision and I think you’ll get a better quality decision out of that."
Council assets group manager Neil Jorgensen said the National Emergency Management Agency required a policy in place, when government money was distributed into a mayoral fund.
"Mayor Kircher has outlined that having a couple more people on that assists with that government money as well," Mr Jorgensen said.
After allocating government funds, any remaining money must be returned to the Crown.