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Requiring councils to perform in a way that is ''most cost-effective for households and businesses'' could see local bodies challenged in court for not taking the cheapest option, the Otago Regional Council says.
Discussing the Local Government Amendment Act 2002 Amendment Bill at the last council meeting of the year, corporate services director Wayne Scott said the term was a ''barb'' as it had the potential for people to take cost-effective to mean the cheapest.
If the council did not take the cheapest option, then ''we could see local government in the courts''.
The rest of the changes to the purpose of local government, which was used to measure all council activities against, should fit, he said.
The council had in the past linked its activities to the former purpose of ''social, economic, environmental and cultural wellbeing of communities''.
It would now have to reassess projects against the new purpose - ''good-quality local infrastructure, local public services and performance of regulatory functions in a way that is most cost-effective'' - as part of its annual plan process early next year.
Council chairman Stephen Woodhead said there were last-minute attempts by Local Government New Zealand to remove the ''cost-effective'' wording but it was unsuccessful.