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Greater Wellington loses $43million on one building

The Taxpayers’ Union is slamming the property management skill at Greater Wellington Regional Council which has lost 95% of the purchase price of the building it used to occupy.

Information released to the Taxpayers’ Union under the Local Government Official Information and Meetings Act show that ‘Pringle House’ in Wakefield Street, also known as the 'Regional Council Centre', was purchased in 1987 for $22 million. In 2014 dollars, that is equivalent to $45.2 million. According to a recent independent valuation, the property is worth only $2.3 million. The documents reveal that ratepayers have taken a loss of more than 95% of the purchase price.

This shows why councils should be extra careful about managing property. At the time when Greater Wellington is taking a 95% loss on its own building, the port it owns is pushing ahead with the Harbour Quay property development, which Wellington ratepayers underwrite.

Last month the Taxpayers’ Union revealed that Greater Wellington had not bothered to enquire into the extent of damage and potential loss resulting from the Cook Strait Earthquakes (click here for DominionPost coverage).

These new revelations do not give us confidence that Greater Wellington are good stewards of ratepayer money. The Council should leave the funding of property development to the private sector and put a stop to risking public money.

Notes:

  • Pringle House, the former offices of Greater Wellington Regional Council, were purchased for $45.2 million (inflation adjusted) in 1987.
  • The building is now worth $2.3 million and is earthquake prone.
  • Consultants have estimated that it will cost $32 million to bring the building up to acceptable standards.
  • The costs to physically relocate the Council offices after the Cook Strait quakes last year were nearly $90,000 (not including staff time).
  • Despite sitting empty, the building is costing ratepayers $17,000 per month.
  • The Council has considerable property risks as debt guarantor of Centre Port’s ‘Harbour Quay’ property developments. 

Click 'continue reading' to view the documents released under the Local Government Official Information and Meetings Act.

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Update on electric cars

We've had plenty of feedback on the story we broke earlier in the week relating to Wellington Council's $100,000 spent on an electric car programme that resulted in an expensive staff car park.

First up, despite our own checking over the Easter Break and a service station attendant telling us that the charging station was lucky to be used once a month, two members of the public have contacted us to say that they use it to charge their electric vehicles. In fact one boasted to Radio NZ that the charging station was 'the cheapest 5 hours of parking in town!'.

There is also uncertainty surrounding who paid for the charging station.  Despite the Taxpayers' Union originally being told that ratepayers forked out for the charging station, we have now managed to assertion that Z-Energy (Shell at the time) paid for the charging station.  The obvious question now is what if anything ratepayers did get for the $100,000 spent by Wellington Council on the programme.  We're aware of:

 

  1. car leasing - the cost per year equivalent to the price of a brand new efficient hybrid
  2. a study into how people felt about the electric vehicles; and 
  3. good media coverage for the Council and the Mayor.
Now that we know that the charging station would probably have been built anyway, the $100,000 spent by the Council hardly seems worth it.

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Cr Young on Wellington City Council's living wage

Cr Nicola Young, whose motion to consult before Wellington implemented the living wage was defeated 8 votes to 5, writes in today's Dominion Post.

Wellington City Council has lit a fuse leading to a bomb of unknown size, with its vote to implement a "living wage" for its employees from January 1.

Councillors often stress the need for evidence-based, reasoned and clear decisions; correct process; and the need to avoid writing blank cheques but there was little - if any - consultation and analysis of the impact this wages policy would have on Wellington households and businesses. Ironic, considering the council has also committed to the capital being "open for business".

This is key. As we've pointed out before, the study by Auckland Council, and advice from the Treasury on the question of whether a living wage policy is a good tool to reduce poverty is damning.

Mayor Celia Wade- Brown has defended this Alice in Wonderland approach by pointing out the council didn't consult on the chief executive's salary either. The reality is that the CEO is paid the going rate in a competitive international market, whereas the "living wage" is an artificial intervention to boost incomes of lower paid workers who happen to work at the council.

The "living wage" proposed by the Living Wage Aotearoa New Zealand Campaign, is higher (relative to GDP per capita) than the United States, United Kingdom, Australia, and Canada. Incredibly, ours is higher than London's; the 18th most expensive city in the world (Wellington is ranked at 74th in Mercer's Cost of Living survey).

This is incredible.  Wellington Council want low income Wellintonians to pay more in rates to fund a 'living wage' higher than London's!  

The piece doesn't mention the hypocrisy of some Wellington Councillors voting to implement a living wage despite not paying it to their own staff.

We're all for higher wages, but taxing more in rates to artificially pay some more is not the way to get there.

Click here to read the rest of Cr Young's piece on the Dominion Post's website.

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Seven Sharp on Transpower's $1.2million cafe/reception

Our Executive Director joined Seven Sharp's Heather du Plessis-Allan to check out taxpayer owned company, Transpowers' new $1.2million cafe on The Terrace, Wellington.  Click the image below for video on demand.

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Are councils fibbing under freedom of information laws?

It appears that the councils of two of our largest cities do not take freedom of information laws seriously. As a constitutional lawyer and advocate for government transparency, I am deeply saddened.

Cost of Wellington City Council’s website - $317,726 or $1.7million? Depends who’s asking…

Last week the Taxpayers’ Union criticised Marlborough City Council for spending $410,000 on web design and development. We made a feature of it on our website and our analysis was even covered in the local paper. We thought the amount was outrageous – ‘$100,000 more than Wellington City’s award winning website’.

We were wrong. Though the Wellington City Council told us it had spent $317,726, it had told someone else it had spent $1.7million on the same wellington.govt.nz site. Though we’ve written (and spoken) to the Council’s CEO, the inconsistency has not been explained. We’ve posted the two information request responses, as well as the ‘please explain’ letter here.

But it gets worse.

We asked Auckland Council about a mayoral trip to China – officials suggested the trip never happened

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Launch of the New Zealand Taxpayers' Union

Dear politicians, bureaucrats and taxpayer funded organisations, 

You are on notice.  The Taxpayers' Union is standing up for Kiwi taxpayers and looking to expose examples of waste, extravagance and silly government expenditure.

We  publicly launch today.

Though we are new, we already know of examples where bureaucrats are not respecting the hard earned income of the New Zealanders who pay for their spending decisions through taxes.  Over the coming weeks we will be exposing some of those examples.

To stay up to date by following us on twitter or liking us on Facebook.

We are encouraging insiders to help.  Maybe you're a respected official, frustrated with waste you see in a department.  If so, please visit our tip line page - we guarantee the confidentiality of all out tip line sources.

A copy of our press release is available here.  You can find out more about on the what we stand for and a Q&A pages available at www.taxpayers.org.nz.

Yours faithfully,

The members of the New Zealand Taxpayers' Union

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