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Ratepayers' Report

The Taxpayers’ Union, in collaboration with Fairfax Media, this morning launched "Ratepayers’ Report” hosted by Stuff.co.nz. 

Ratepayers' Review 

Ratepayers’ Report builds on the work of local government expert and financial analyst, Larry Mitchell and his work in previous years comparing New Zealand’s 67 territorial authorities. The data was pulled together by the Taxpayers' Union and supplied to Fairfax Media. Fairfax has had the data checked independently and supplied it to councils for viewing before its publication.

For the first time, New Zealanders now have an interactive online tool to compare their local council to those of the rest of the country. Go to Ratepayersreport.co.nz to compare your local council including average rates, debt per ratepayer and even CEO salaries.

Ratepayers’ Report compares, for the first time, average residential rates.  The figure has been calculated using a methodology developed within the local government sector to compare average residential rates.  Only Kaipara District Council was unwilling to provide the Taxpayers’ Union with the average residential rates information.

Some highlights: 

  • New Zealand’s highest average residential rates are in the Western Bay of Plenty District, $3,274
  • The Mackenzie District has the lowest average residential rates, nearly two thirds less at $1,104
  • The average council liabilities are $4,386 per ratepayer
  • Auckland Council’s liabilities are now $15,858 per ratepayer (and increasing!)
  • Dunedin is not far behind. For every Dunedin ratepayer, the Council owes $15,093

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Update on Dunedin Mayor’s “Gentleman’s agreement”

We now have more details of the deal uncovered by the Taxpayers’ Union over the weekend between Dunedin’s Mayor Dave Cull and former MP, Pete Hodgson, which the Mayor described in the media as a “gentleman’s agreement”.

This morning’s Christchurch Press editorial analyses the deal:

Editorial: Gentlemen sign contracts too

...

There is no reason to believe that Cull and Hodgson are anything other than honest gentlemen, but the geographic accident that also gives them "southern man" status should not put them above the usual requirements by which local government business is conducted.

The standards that apply to council administration in the south should be no less rigorous than in Auckland city or the Whangarei district. Why should ratepayers in Dunedin tolerate a more easy-going attitude towards the spending of their money than anywhere else, just because of a romantic notion that southerners are somehow more honourable? Actually, they aren't.

Click here to read more.

Mr Hodgson has provided emails from him to the Council from August 2013, relating to 40 hours of “consulting” equalling $3,200 of the $3,400 total we questioned.

It appears the Council was wrong to tell us that no documentation or invoice was available.

Producing an invoice under public pressure is only one aspect of the matter settled. It raises a whole lot more questions:

  • Was it signed off by Council or did it come from a mayoral slush fund? 
  • Who authorised the payment?
  • How come the Council could not provide this information before? Why did it need to come from Mr Hodgson?
  • What other payments are made without the Council’s finance department holding documentation?
  • Was the Council deliberately misleading us when they told us no documentation existed? If so, why?
  • What else does the Mayor negotiate without documentation?
  • How is it appropriate to have the Mayor hire someone to do work with no authorisation, no contract, and not even retain the invoice?
  • With the Council's audit and risk committee be examining what's happened here?

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Payments by Dunedin City Council to former MP with no documentation

This morning the Taxpayers’ Union went public with material concerning a payment (or payments) totalling $3,400 by the Dunedin City Council to former MP Pete Hogdson with no documentation or contract.

We're questioning the internal controls at the Council after the uncovering the payment following a recent media report that Mr Hodgson had been recruited by the Council for lobbying. We asked for information about the services being provided by Mr Hodgson under the Local Government Official Information and Meetings Act. Click "continue reading" below to view the Council's response.

According to the Council, Mr Hodgson’s work consisted of “lobbying and advocating on behalf of the Council” and there is no supporting documentation. 

The Council has told us that:

  • Everything was verbal. The Council could not provide a single report, email, or even letter of engagement.
  • All of the contracts were negotiated verbally.
  • The contracts were negotiated by the Mayor and there is no documentation to explain the deal.

We asked for copies of any work by Mr Hodgson. All we got back was two letters by the mayor on which Mr Hodgson apparently had input. It is not clear what precisely that was. For example, there is no 'tracked changes" document.

We think Dunedin ratepayers will be alarmed that their Council paid $3,400 without so much as an invoice. We plan to write to the Mayor to to ask:

  • What did Mr Hodgson do? Was this just expensive proof reading?
  • Why was the Mayor negotiating this in the first place?
  • Why verbally?
  • Why is there absolutely no documentation for the arrangement, not even an email?
  • Is Mr Hodgson friends with the Mayor?
  • Why doesn't Dunedin Council have the most basic internal controls, requiring amounts to be paid by invoice only?

The Council’s response raises serious questions.  We can't think of another government agency that would spend $3,400 without being able to provide as much as an invoice. 

Without an explanation from the Council, we are left wondering whether the Auditor-General should get involved."

Dunedin City Council LGOIMA response - Pete Hodgson

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Mayor Brown must pay the money back

As widely covered by media over the weekend, the EY report into suspected misuse of Auckland Council resources by Len Brown is deeply concerning. In addition to the undeclared freebies (including undeclared gifts from Skycity - at the same time as publicly championing the convention centre deal) the report fails to deal with the concerns raised by the Taxpayers' Union in relation to the Mayor's trip to China in January 2013. We still don't know for example:

  1. What was Mayor Brown's spending on the trip?
  2. Why was the trip not announced in the same way as other official trips by Mr Brown?
  3. Why did officials mislead us about the existence of the trip?
  4. Why were officials instructed to refer all enquires about the trip to Mr Brown's Chief of Staff?
  5. Were officials instructed not to disclose the existence of the trip?
  6. What was/is the Council or Mayor trying to hide?

Apology hollow without offer to refund Auckland ratepayers

Today we called on Mr Brown to pay back the money for both his personal expenses and undeclared gift listed in the EY report.  Without the offer to pay the money back, we think the apology made by Mr Brown today to ratepayers is meaningless.

Click continue reading for our media release.

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Competition winner announced

Yesterday the Taxpayers’ Union  announced the winner of its competition for the Aucklander with the highest percentage increase in rates and user-charges.

The winner is Mrs Glenys Smith of Howick, whose rates have more than doubled since 2003.

Mrs Smith is a classic example of an Auckland householder paying more but getting less. In 2003 Mrs Smith’s rates were $1,371 in 2003. They are now more than double, up to nearly $3,100 for 2013/2014.

Mrs Smith also pointed out in her entry that, “When the wastewater charges were taken off the rates, the rates didn’t go down to compensate!”

Mrs Smith wins a KraftMaster petrol lawnmower (perfect for mowing the berms).

The other winner is Mr Colin Shearer of Sunnyhills. Though Mr Shearer didn’t provide the required user charge details to qualify for the lawnmower, his un-capped rates increase was the highest we received. As a discretionary prize, the Taxpayers’ Union is giving Mr Shearer a weed-wacker.

Mr Shearer’s uncapped rates increase is 34.2 per cent, from the 2011/2012 base year. That means that his rates will be over a third higher, in less than four years.

While Len Brown is hiding behind the ‘average’ figure of 2.5 per cent, this is merely an attempt to disguise just how much extra some Auckland households are paying. As the entries show, many Aucklanders are paying much more, while the Council is reducing services such as berm mowing.

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Kaipara District Council’s wastewater project - an expensive audit failure?

The report of the Auditor-General’s inquiry into the EcoCare wastewater project was released on Tuesday. It revealed serious failures in the management of the project, and strongly criticises Audit NZ. Inaccurate record keeping, mismanagement of the project, lack of financial advice and expertise, and reliance on private partnerships saw a huge budget blowout, with costs exceeding over $63m. For example, the effluent disposal bill alone increased from $361,000 to $14m.

How did the Council pay for this budget blowout? By raising rates for Mangawhai residents. The annual cost to ratepayers was a consideration in assessing the affordability of the project. However, the summary of the report reveals that the Council in fact decided to “increase the number of estimated ratepayers that would be covered by the scheme and contribute to funding it”. This is a fundamental flaw, and the Auditor-General concluded that this decision was not based on an adequate account of predicted growth in the area. This, as well as the undisclosed liabilities are precisely the things Audit NZ should have picked up on.

Overall the report suggests Audit NZ was failing audit 101

The Auditor-General's office (which includes Audit NZ) is supposed to provide assurance that government departments are performing as they should. The report details that:

  • audit quality of the project was varied;
  • the quality of documentation for some audit files were inadequate, especially those explaining why judgments were reached;
  • there was a failure to reassess the project between 2006-2009 despite significant changes that could have been an audit risk; and
  • the auditor’s reliance on information from Kaipara District Council’s management (which, from our examples above, were also clearly inadequate).

Joel Cayford has written a blog post evaluating the report. He’s gone a step further than the Taxpayers’ Union, and believes that an unreserved apology does not cut it, concluding that the Auditor-General's 'head is on the block'. 

Many audit failures internationally have led to large payouts by audit companies and their insurers to shareholders. Here, the tab was left with Kaipara ratepayers. The report does not address what we think the issue is: redress for the Kaipara ratepayers who paid the bill.

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