Kaipara Council 'running on luck'

Email
Print

Kaipara Council 'running on luck'

3News NZ

Because of a huge cost blow-out in constructing Mangawhai's wastewater scheme, the council is facing a debt crisis

Because of a huge cost blow-out in constructing Mangawhai's wastewater scheme, the council is facing a debt crisis

By Brook Sabin

Serious questions are tonight being asked of the troubled Kaipara Council after a report obtained by 3 News outlined major legal concerns.

It comes as the rates revolt against the council in the rural district north of Auckland gathers steam, with around 10 percent of rates overdue.

It is an idyllic, isolated part of the country.

But because of a huge cost blow-out in constructing Mangawhai's wastewater scheme, the council is facing a debt crisis.

“The mayor and the deputy must resign,” says Ron Manderson, chairperson at the Kaipara Citizens and Ratepayers Association. “We must have hope and new leadership.”

Debt aside, documents obtained under the Official Information Act by 3 News outline a number of other serious issues.

They reveal the council was "using an unhedged floating rate for its borrowing for the Mangawhai wastewater scheme".

That means the council could have been seriously exposed if interest rates had gone up.

The mayor admits that's a dangerous practice for a huge loan, but it got away with it because interest rates stayed low.

“I think it was more luck than anything else,” says Kaipara mayor Neil Tiller. “Had interest been going the other way we would have paid for it.

“We shouldn't be running a council on luck, but we took advice on borrowing.”

The report also notes the council "was using cash reserves to pay its day-to-day operating costs”. It says these are reserves that cannot legally be used for any purposes other than the ones for which they were set aside.

“Up until these issues came to head we had no idea we were not complying with the Act, and we've done everything in our power to make sure we comply,” says Mr Tiller.

Almost 1500 ratepayers have overdue rates – that's 10 percent of the rating base and 900 more than last year.

That's because a rates revolt is now underway.

“The situation is so calamitous, it's the last resort left to most ratepayers,” says Mr Manderson.

The mayor says overdue rates aren't casting a cloud on finances, but will make the situation worse if the revolt continues.

3 News

Post a Comment

Before commenting, please take the time to read our moderation guide


(Won't be published)



Comments

8/08/2012 5:05:07 p.m.

Julz wrote:

How is withholding payment of due rates going to help this situation? Did anyone predict the financial downturn that would halt the development of Mangawhai? This is not just happening in Kaipara however we seem to be getting a hammering by the media including some local....why???? Maybe some people are pushing their own agenda? Why the hell-bent calls for the resignation of the mayor & deputy by the same people over & over? One wonders.

23/07/2012 12:44:31 p.m.

Rick wrote:

Councils have been given free reign by successive governments and this trust by showing their total incompetence at responsible rate payer money management. Not only should councillors and mayors involved with such bad decision making resign immediately but they should also face criminal negligence charges. They should not allow to get away scott free the crime of indenturing an entire generation of rate payers!

23/07/2012 8:24:26 a.m.

Elli wrote:

Its not only Mangawhai, we here in Russell are experiencing similar problems. Our rates will go up by 30% or more due to a sewerage system that we are paying for since 20 years now, but all councils in the past 2 decades have mismanaged the processes, costings, engaged in dubious loans, used the targeted rates money for pet projects etc.This is well documented. THe Russell peninsula is already paying the highest rates in the Far North. So what are our options? If we take this to the courts we will have to pay the council's legal costs with our rates and although Russell seems to be full of millionaires (according to o our very cynical, power hungry mayor Wayne Brown) we cannot afford to challenge this through legal process. Yep so many mayors and their cohorts behave like dictators,using their electorates like fifedoms, with a level of incompetence no board in private enterprise would tolerate (on second thoughts I might be wrong here if I think about the global finance sector).

22/07/2012 8:21:02 p.m.

kevin turner wrote:

under the local and goverment tender process there is no way for cost blow outs as like what has happened with the mangawi sewage scheme how did this happen

22/07/2012 6:52:02 p.m.

Debra howard wrote:

We are expected to pay $4000 per year in rates on a house with a CV of $400,000. For this we have no footpaths, no street lights, no council rubbish collections ( prepaid bags) no recycling (prepaid bags), no town water supply (tank water), and council forgot to put a pipe in our road for residents to connect to the new wastewater system, even though we are 50m from the entrance to the main pump station. What are our rates paying for???