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.

The Hawke's Bay Today has picked up the story on the omnishambles that is the Napier Museum.

The New Zealand Taxpayers' Union has labelled the MTG Hawke's Bay museum's problems an "omnishambles", while Hastings Mayor Lawrence Yule has denied Napier Mayor Bill Dalton's claim they knew about storage issues with the facility as early as last year.

At Wednesday's City Development Committee meeting, Mr Dalton said the previous council and Mr Yule were made aware last year that there were issues relating to storage at the museum. That was refuted yesterday by Mr Yule who said he would have taken steps to remedy the situation, had he known about it.

"Firstly, I would have told my council straight away, because we are governors of half that collection, and two, we'd have worked out - what is the plan and how can we fix this?" he said.

"There was a conversation a number of years ago about whether we should have off-site storage. It was decided not to do that, effectively because the operating costs of having two facilities would be high.

"Until a week ago, that was my understanding of what was happening."

Mr Dalton declined to respond to Mr Yule's denial.

This week it was revealed there were storage issues at the new museum, with only as much as 40 per cent of the collection able to be housed - a figure Mr Dalton said was inaccurate.

Furthermore, at Wednesday's meeting projected visitor targets were found to be grossly erroneous with this year's target of 690,000 visitors reduced to a more realistic 120,000.

At the meeting tourism services manager Neil Fergus said the targets were based on the old building, which allowed for a free public flow through the Century Foyer "which is no longer relevant to the redeveloped site".

Mr Dalton said yesterday he would not get involved in a debate with the New Zealand Taxpayers' Union.

"We've built a magnificent new building.

"We do require some fine tuning and we're going to undergo a review to get it fine tuned. End of story."

He was unsure when the planned review of the MTG issues would be completed as Napier City Council chief executive Wayne Jack was away on the Hawke's Bay Regional Council's dam fact-finding trip to the South Island.

"I'm not going to make any comment until we've done the review," Mr Dalton said.

"Let us get the review done and see what the facts are."

Meanwhile, Jordan Williams of the Taxpayers' Union said: "A three-children family doesn't build a two-bedroom house, but Napier has built a museum forgetting 40 per cent of its collection. It is a complete omnishambles."

Lawrence Yule contacted me this morning and said that not only did he not know of the situation in Napier, neither did Hastings District Council officials. I know Lawrence and accept his word. It appears that he's been dropped in it by Dalton.

Nevertheless Hastings ratepayers helped fund this museum and deserve answers (presumably from Napier!).

It appears that Hawke’s Bay mayors may have known of the omnishambles at the new museum in Napier a year ago and apparently have failed to do much about it.

The museum and gallery opened last September and cost Hawke's Bay ratepayers $18 million to build.  To recap, last month we learned that the budgets were wrong:

Napier City Council has been caught short after discovering that thousands of people it thought were visiting its museum were just popping in to use the toilets.

Now it needs to revise its 10-year plan after finding that the projected visitor numbers for its new $18 million museum and gallery were based on inaccurate figures.

Then we found out that the museum cannot hold the collection it was built to accommodate. In fact, it is so small up to 40% will need to stored at an as yet unknown site. Radio NZ, The Dominion Post and TVNZ covered the story. 

Then began the spin from Napier City Council that they knew of the problems all along, but were nevertheless conducting a 'review' on how it happened.

This morning the Dominion Post reported that Hastings Mayor Lawrence Yule was aware of the situation, an allegation made by Napier's Mayor but strongly refuted by Mr Yule. The whole saga appears to be resulting in a somewhat undignified spat between the mayors of the Bay cities.

I venture to suggest that there is more to come of this story...

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.

MEDIA RELEASE

BROWN APOLOGY HOLLOW WITHOUT OFFER TO REFUND RATEPAYERS

16 DECEMBER 2013
FOR IMMEDIATE RELEASE

The Taxpayers’ Union is calling on Auckland Mayor Len Brown to pay back the amount owed to Auckland ratepayers for his personal expenses and undeclared gifts listed in the EY report released on Friday.
 
“Len Brown’s apology is meaningless without an offer to pay the money back,” saysTaxpayers’ Union Executive Director Jordan Williams.
 
“Mayor Brown hasn’t addressed whether he will be paying back the $2,898 EY calculated were the costs of personal calls borne by ratepayers. While the nearly $40,000 worth of gifts Mayor Brown received were mostly services in kind, his failure to disclose them puts a moral obligation on Mayor Brown to pay for them.”

"Mayor Brown is one of the few senior Labour Party figures to publicly back the SkyCity Convention Centre deal. That we now know he was secretly receiving gifts of SkyCity raises serious questions. At the very least he should pay the money back," concludes Williams.

ENDS

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.