We've received confidential minutes and a briefing via the tip-line relating to CentrePort’s problematic BNZ building which suggests the building will not be fully reoccupied until the end of October.

What should be one of Wellington’s most modern and safest buildings looks to be still plagued with problems eleven months after the Seddon earthquake.

We understand that CentrePort is having to fork out more ratepayer money on seismic restraints on the risers and that there are now new problems with windows popping out in Pier 3.

If ever you needed an argument as to why ratepayers should not be underwriting property development, the BNZ fiasco is it.

Greater Wellington needs to abandon its policy of secrecy and explain how much these problems at the BNZ building are costing ratepayers. Latest estimates are in the tens of millions.

In May the Taxpayers’ Union revealed that the Greater Wellington Regional Council guarantees CentrePort’s debt, including borrowings related to property development.

MN_Minutes_PCG Meeting

The Taxpayers’ Union has today published a new report by Jono Brown that suggest ways local councils can save money and reduce the rates burden on New Zealanders. Rate Saver Report: 101 Ways to Save Money in Local Government is a guide for local authorities on how they can cut waste, save money, reduce bureaucracy and ultimately lower rates. The report adopts many suggestions made by the country’s mayors, and is based on similar reports published in the United Kingdom.

Click here to read the full 101 ways

Too often we hear unimaginative councillors insisting that they have no choice but to increase the rates burden. Before they even consider increasing rates they should consider all of the suggestions in this report.  In future, any council claiming that raising rates is the only option had better be able to prove that they have implemented or at least considered implementing every single idea we are putting before them today. If not, they won’t be able to look their residents in the eye and insist that they have exhausted the possibilities for saving money.

Ray Wallace, Mayor of Lower Hutt, says in a foreword to the report:

"I urge local government people to take these suggestions as a challenge. If you do not like them, come up with some better ones."

Tim Shadbolt, Mayor of Invercargill City, says in a foreword to the report:

"Having been a mayor for 28 years and finally achieving a rate increase of less than 1%, I’ve learnt to face many challenges and this publication is certainly challenging. Some of the ideas are obviously worthy of discussion and others are clearly designed to provoke discussion."

Highlights of how councils can save money:

• Pay back council debt (#1)
• Incentivise innovation (#2)
• Stop providing free lunch and booze for councillors (#3)
• Don’t fund or join chambers of commerce (#4)
• Publish all accounts payable transactions (#5)

Other notable suggestions include:

• Scrap political advisors (#10)
• Get rid of professional sports subsidies disguised as ‘economic development’ (#17)
• Cancel annual subscription to Local Government New Zealand (#24)
• Stop producing glossy brochures (#33)
• Lease art the council can’t sell (#99)

The Taxpayers’ Union would like to thank the many Mayors across the country who responded to the Union's invitation to submit ideas and examples of their council saving ratepayers’ money.

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. 

 Letter from GWRC to NZTU 23 May 2014

 Attachment 1 to OIA 2014 065 - Telfer Young Market Valuation

Attachment 2 to OIA 2014 065 - Spencer Holmes Final Report on the RCC Building

Attachment 3 to OIA 2014 065 - Dunning Thornton Seismic Status Peer Review Report

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

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

The Taxpayers’ Union has been provided a copy of a leaked report Local Government New Zealand (LGNZ) commissioned. The report was prepared in response to work by the Taxpayers’ Union to improve transparency in local government. Earlier today Ratepayers’ Report – interactive local government league tables – launched at ratepayersreport.co.nz.

We've also been leaked confidential briefing papers for council CEOs. These appear to have been prepared by LGNZ's spin doctors as an aide for councils to avoid any criticism resulting from questions relating to Ratepayers' Report and other efforts by the Taxpayers' Union.

We approached LGNZ earlier in the year and sought its help to ensure New Zealanders got a fair picture of how their local council is doing. Instead, LGNZ went into defence mode and hired an accountancy firm to discredit the expert analyst we were using. They were not interested in ensuring ratepayers got an accurate picture, rather creating reasons why we shouldn’t be providing the public with the information.

Despite promising that the report would be made available to the Taxpayers’ Union, we’ve only seen it today because it was leaked to us. The report suggests that LGNZ is more interested in toeing the party line, rather than identifying the councils which are under-performing.

The report, by Grant Thornton, appears to have little basis for what they deem as ‘acceptable’ for the financial measures they apply to councils. They've not provided a league table, or a scoring system and even the data points on the graphs do not reference the councils they relate to.

It appears they’ve put in the data then picked the spot that shows that everyone is doing well.

The report makes soft criticisms of Kaipara District and Waitomo District Councils - but then defends them. It makes assertions that all under-performing councils are dealing with their issues. To us it demonstrates that LGNZ is a lobby group to protect local councils rather than a champion of best practise.

Grant Thornton Report_Local Government a Financial Snapshot

Further to our questioning of the use of a rates figure that does not include new targeted rates, the Wairoa District Council has issued a media release:

Wairoa District Council Defends Against Negativity

Wairoa is transforming into a vibrantly energetic part of New Zealand and will no longer accept spin-driven criticism. This is the message from newly-appointed CEO of Wairoa District Council Fergus Power, in response to recent criticism by the New Zealand Taxpayers Union over a proposed budget increase.

Describing it as just another example of ‘Wairoa-bashing’, Mr Power said it was a cheap shot that distracted from the fact that the district is very much open for business.

“I have been appointed to bring about a transformation within Council, and within the district. The first step requires active rebut of the sort of nonsense that has been promulgated for years – that Wairoa is in decay, has inept leadership, and is incapable of a sustainable, prosperous future. In fact, Wairoa district has the youngest and most vibrant population structure of all of the cities and districts in the Hawke’s Bay region – with 25% of the population aged between 0-14,” said Mr Power.

“That is backed up with some of the warmest and most welcoming people, a rich and proud Maori culture, the kindest climate imaginable, and a surfeit of fish, game, and opportunities to recreate in the vast outdoors – which includes the stunning Lake Waikaremoana and Te Urewera National Park, and the world-renowned beaches of the Mahia Peninsula, with sun, sand and surfing”, he said.

Wairoa Mayor Craig Little said Wairoa would no longer accept baseless scaremongering.

“I will defend Wairoa district’s reputation aggressively. We are no longer a punching bag. We are punching above our weight and we have much work to do as a community”.

"When the punching bag looks like blue sea, warm sand, sunshine, and an energised and dedicated community committed to a complete transformation of the district – it becomes a slightly harder target. In fact, why would you even want to diminish it?

NZTU criticism was centred around the Draft Annual Plan 2014-2015, which is currently in the consultation phase.

The plan includes a 5.43 percent increase in the budget, which does not include the funding requirements for the Mahia and Opoutama Wastewater Schemes. Ratepayers not involved in either wastewater scheme are not affected by these funding requirements.

Participants in the wastewater schemes are being consulted with separately, as they have several options for repayment. Figures that relate to these schemes in the Draft Plan reflect the default repayment option, although the choices those participants make will have a significant impact on the projected rates requirement.

All Wairoa ratepayers are sent individual draft rates notices, which record the proposed rates amount for their individual properties under the Draft Annual Plan.

Visit www.wairoadc.govt.nz to view the plan in full and make an online submission. Consultation closes at noon on Thursday, June 12.

Ends

We reject that our comments were 'Wairoa bashing' and would rather stick to the issues. 

We accept that the Wairoa District Mayor and CEO were not intentionally misleading Wairoa ratepayers in relation to rate increases related to the Mahia and Opoutama Wastewater Schemes. We also accept that the Council has consulted widely on those schemes and those ratepayers affected are likely to be aware, or will soon be aware, of the financial implications of the schemes and following further clarification we without reservation apologise for any malignment of the character of the Mayor and CEO of the Wairoa District Council.

We still believe that the Council was wrong to use the 5.43% in material issued publicly, without making it clear that this figure did not include spending and rates related to the wastewater schemes. The draft annual plan shows that total rates income (including the targeted rates) is estimated to increase by 15.9%. We thought that it was proper, and still think it proper, to raise the matter publicly. In part we relied on a statement from a Council officer  that the wording was ‘loose’. After assurances from the Council’s CEO that the Council had not meant to mislead the public, we are happy to let the matter be debated as part of the normal draft annual plan consultation process.

Wairoa ratepayers should be furious with the Wairoa District Council for misleading the public on its forecast rate hikes. Earlier today the Taxpayers’ Union discovered that statements by the District’s Mayor and CEO that rates are forecast to increase by 5.43% are fanciful. The real figure is in fact 15.9%.

Earlier today the Taxpayer's Union were alerted to a slight problem with two statements contained in Wairoa's draft annual plan, currently open to public consultation.

In the introductory statement by the Mayor and Council CEO they claim that on average rates are increasing by 5.43%. But when we do the math, not based on the spin but on the financial numbers in the same paper, we come to a whopping 15.9%

So how do the two amounts reconcile? We wrote to the CEO to ask:

Here's the draft annual plan we quote. Note pages 1 and 91: 

Late this afternoon we received a call from a Council official who reports to the CEO and had a frank conversation. Amazingly the official acknowledged what he termed as 'loose' wording by the CEO and Mayor. Apparently when the figure was originally reported to the Council it included a significant proviso that two new rates were not included.

The 5.43% figure does not include two new rates which relate to two waste water schemes. Once you include those the rates increase is nearly three times the percentage the Mayor and CEO were trumpeting.

We're calling on the Wairoa Council CEO, Fergus Power, and Mayor, Craig Little, to apologise to Wairoa ratepayers, and correct their misleading statements in the draft annual plan.

What do you think? Acceptable spin, or misleading the public? Comment on our Facebook page here.

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.

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 apparently without so much as an invoice. Dunedin ratepayers should ask their Mayor:

• 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

Yesterday we issued a media release in response to a Dominion Post report stating that earthquake strengthening work on the Wellington Town Hall has been halted due to a $17 million budget blowout. The total cost of the work is now estimated to cost $60 million. We noted that this equals $871 per Wellington household.

Whilst the town hall is a lovely building, at this cost it seems unaffordable, and our understanding from a property expert is that it could be much cheaper to replace it with a new, fit for purpose building using the existing facade and features Wellingtonians treasure. Newstalk ZB covered our release here.

Today the Dominion Post followed up the story, reporting:

Wellington City Council has refused to reveal how much it has already spent on town hall strengthening work, which has been put on hold after a budget blowout of about $17 million.

The Dominion Post revealed yesterday that the cost to strengthen the hall had ballooned from a budgeted $43m to about $60m.

City councillors will have to go back to the debating chamber later this year to decide if it is worth spending that much.

They could look at cheaper alternatives, or at replacing the town hall on the same or a new site.

The council intended to use a base isolation system to bring the strengthened hall up to 140 per cent of the new building standards (NBS).

Engineers have assessed the building as meeting just 20 per cent to 25 per cent of the NBS. Anything under 33 per cent is deemed earthquake-prone.

Work has now stopped, just three months into the three-year programme, as the council considers its options.

Given that ratepayers are paying for the work, we think they should know how much has already been spent on the building, even if work has now been halted due to an overspend. We're requesting the information under the Local Government Official Information and Meetings Act.

The Council faces the same problems as many Wellington property owners. In some cases it has declined resource consents to demolish dangerous buildings that have been uneconomic to upgrade. It will be interesting to see what the costs (and solution) are.