Havelock North gastro crisis costs district council $900,000

CRISIS: The Havelock North gastro crisis cost the Hastings District Council about $855,000 in investigations and legal costs, the council has revealed today.

Last year's Havelock North gastro crisis has cost the Hastings District Council nearly $900,000 in investigations and legal fees, the council says.

The council today released details of its legal and investigation costs associated with the Hawke's Bay Regional Council prosecution, the Government Inquiry and the investigation into the cause of the contamination.

Prosecution costs amounted to $71,000 for legal costs and $200,000 for technical investigations.

Finding the cause of the contamination and helping the Government Inquiry cost $133,000 for legal fees and $451,000 for technical investigations.

It is unclear how much will be passed on to ratepayers. Council CEO Ross McLeod said he hoped insurance would cover some of the prosecution costs. He also confirmed that the spending was being covered by existing budgets.

McLeod said investigation costs were not solely attributable to the Government inquiry.

"We are a water supplier, and our community has made it clear it wants us to find out how the contamination occurred, and to make sure it can't happen again," he said.

"While this work will be crucial for the inquiry, we would have done much of it anyway."

The costs related to the regional council investigation and prosecution would not have been incurred had the council not decided to prosecute, McLeod said.

"While we are pleased the councils were able to agree to the withdrawal of the prosecution proceedings, we are still puzzled as to why the council made the decisions it did.

"Hawke's Bay Regional Council has no mandate to investigate the contamination of drinking water and no powers under the Health Act."

The regional council this week released figures showing it had spent just more than $1 million on internal salary and external costs related to its investigation and the ongoing Government inquiry.

It spent about $445,000 trying to determine whether the contamination was the result of resource consent conditions not being met.

That investigation was now complete and the regional council has now dropped its two charges that the Hastings council unlawfully took water, because Hastings conceded the consent breaches and agreed to not contest two infringement notices, resulting in two fines of $500 apiece.

Regional council staff defended the costs incurred because of the water contamination this week.

Group resource manager Iain Maxwell told a full council meeting yesterday that even through the prosecution was dropped, the time and expense involved in getting the information was still useful.

"We initially launched the investigation in August last year when we were told there was a widespread contamination of the aquifer, and we wanted to investigate whether that was correct," he said.

After extensive sampling across a large area, they confirmed that this was not the case and the aquifer was not contaminated, Maxwell said.

Although the work was costly, it came within estimates with internal staff costs provided for in council budgets, and external costs funded from the 2016-17 budget provisions and the surplus operating position from 2015-16.

"The costs are about where we thought they would be - the work has been expensive but no one else in the region had the capacity or capability to do it," Maxwell said.

Up until January 16, the council had spent $637,310 on the Government inquiry, $413,000 of that being legal fees to the firm Chen Palmer, and $184,369 in internal costs.