Adelaide Hills Council deficit grows from $1.7m to $3m amid mystery rise in legal fees

Last year, a huge budget black hole was revealed – now Adelaide Hills Council has almost doubled its expected operating deficit.

Adelaide Hills Council's council chambers and building in Stirling.

Adelaide Hills Council has almost doubled its operating deficit amid another increase in legal expenses, less than a year after the council revealed a huge budget blowout.

A council report last month said the expected 2024/25 deficit had risen from $1.728m to $3.013m because of deprecating assets, interest expenses and legal fees.

The report said the council’s legal costs in the governance area alone were projected to reach $400,000, assuming the current rate of legal matters before the council slows down.

AHC chief executive Greg Georgopoulos said the legal fees related to “ongoing confidential matters and procedural fairness requirements”, but he did not reveal whether the matters stemmed from previously reported disputes between Mayor Jan-Claire Wisdom and councillors.

Mr Georgopoulos said the council identified the deficit increase as a result of “a comprehensive review to assess the underlying assumptions used in the preparation of budgets and financial statements and ensure best practice financial reporting in the future”.

“Council’s overall financial position remains strong, and our commitment to applying best practice accounting procedures will ensure we enter the next budget cycle with greater clarity and confidence,” he said.

The Adelaide Hills mayor's new office in Stirling Coventry Library, where she was sent to work away from council staff. Picture: Supplied

The latest deficit increase came a week after the council announced its director of environment and infrastructure, David Waters, would be leaving in March.

In the previous financial year, the council recorded a surprise deficit of $4.863m instead of a $559,000 surplus, which the council blamed on erroneous budgeting and accounting practices under the previous chief executive.

The council also spent $327,710 on lawyers in the previous financial year – $80,047 more than the previous 12 months.

These figures were revealed against a backdrop of multiple controversies that rocked the council last year.

In November, the council alleged an investigation found Dr Wisdom bullied staff and misled the community and council.

The report found Dr Wisdom had breached eight standards and “covertly” recorded fellow councillors. She was censured by the council after the findings were revealed.

In December, the council called police after the mayor’s husband “caused disruption” and refused to leave a council meeting.

The council lost nearly a quarter of its staff last financial year.

Mr Georgopoulos previously said AHC had restructured its directorates to focus on enhancing services and “delivering better outcomes”.

The loss of 49 staff members – about 22 per cent of its 215 full-time equivalent employees – included three of its senior directors, with decades of experience lost between them.

Originally published as Adelaide Hills Council deficit grows from $1.7m to $3m amid mystery rise in legal fees