Sabin Mike: Kaipara District Council (Validation of Rates and Other Matters) Bill — First ReadingText is incorporated into the Bound VolumeSabin Mike: Kaipara District Council (Validation of Rates and Other Matters) Bill — First Reading[Sitting date: 12 June 2013. Volume:691;Page:11087. Text is incorporated into the Bound Volume.]MIKE SABIN (National—Northland):I moveThat the Kaipara District Council (Validation of Rates and Other Matters) Bill be now read a first time. I nominate the Local Government and Environment Committee to consider the bill. No one is a fan of retrospective legislation least of all I suspect the local MP who is placed in an invidious position when asked to sponsor such a bill. However in some situations validating legislation is unfortunately required as we have seen recently with the Tasman District Council (Validation and Recovery of Certain Rates) Bill. This legislation is understandably unpalatable but I am of the view that in the case of the Kaipara District Council it is also required. Legislation of this nature is a last resort and reflective of failures by those entrusted by ratepayers to serve their district.In May 2012 major concerns over financial governance and community pressures on the council culminated in a ministerial review of the council. The review team was appointed to inquire into the financial and governance challenges facing the council. A damning report resulted in a request from elected members of the council asking the Minister of Local Government to appoint commissioners which did occur in September 2012.In addressing a range of irregularities the commissioners have asked for Parliament’s help. As the local MP I have agreed to assist as I think in these particular circumstances this bill is the only viable and practical way to deal with a history of errors made by the council. I hope that ratepayers all across the Kaipara accept that addressing these matters is necessary to bring clarity and certainty—something that is in the best interests of all moving through and beyond a very sad and sorry error of governance in the history of this fine district. I do however want to make something quite clear. This bill does not absolve those responsible for these errors and nor would I support it if it did. Although this bill is important to remedy the irregularities I want to assure the House and all ratepayers of this district that accountability is just as important in rebuilding the Kaipara as any part of this process.Alongside this bill the Office of the Auditor-General is conducting an inquiry into the Mangawhai EcoCare Wastewater Treatment Scheme the genesis of most of the debt blowout in this council. There is also an independent inquiry into the council’s auditors. The commissioners are carrying out their own inquiry into council decisions and activities including the actions of former chief executive officer Jack McKerchar.But turning to the specifics of the bill it seeks to correct a number of irregularities and errors mostly to do with rating by the Kaipara District Council. These procedural and substantive irregularities go back many years. There has been a substantial review undertaken including engagement with the community over the scope and extent of rating irregularities. Most of the rates that this bill attends to have been paid. Ratepayers have received services for which they were set but none the less these need to be validated once and for all so that the Kaipara can move on. The bill proposes to validate the rates set and assessed by the council from 2006 to 2013 and any penalties added tothose rates to treat all rate payments received by the council as having been lawfully paid and to authorise the council to recover any part of rates and penalties for those years that remain unpaid. The specific rates dealt with within the bill include a forest owners’ road impact rate the Mangawhai uniform targeted rate the Mangawhai uniform annual charge the waste-water disposal rate and the water supply rates for Maungatūroto and Station Village.The bill also addresses actions or omissions related to the continuation of the council’s 2006 development contributions policy the late adoption of its 2011-12 annual report and its 2012-22 long-term plan and finally the conduct of the council’s special consultative procedure for the 2012-22 long-term plan.This bill seeks to validate the rates that were actually set and then assessed against each property. It does this so that any ratepayers who are up to date with their rates payments are not required to make additional payments as a result of the local bill being passed into law. Some of the rates to be validated were set on the basis that was not provided for in the Local Government (Rating) Act 2002. There were also a number of discrepancies that reflect poor practice with no attention to detail to ensure that rates resolutions were consistent with the funding impact statement. Importantly these rates could have been lawfully struck if the council had simply ensured that the two documents were consistent. Similarly shortcomings exist and the same principle applies to all of the irregular rates that the council is seeking to validate through the bill.In short all of them could have been struck in a way that was consistent with and provided for in the Local Government (Rating) Act. That would have resulted in the same amounts being invoiced as occurred when it got this process wrong. That said these sorts of errors are totally unacceptable and are avoidable. But sadly the Local Government (Rating) Act 2002 as it stood at the time of this mismanagement incompetence carelessness and dysfunctional governance falls short of triggering the ability for the Government to intervene and bad practice does and has occurred. Ratepayers should be able to have confidence in their elected councillors to carry out their core functions but in this case the ratepayers in the Kaipara have been woefully let down and are rightfully upset angry and frustrated. The council accepts that it made mistakes. It is now asking for this Parliament’s help to correct the situation.I have received criticism from some people who are opposed to my decision to bring this bill to Parliament mostly from members of the Mangawhai Residents and Ratepayers Association. I have received angry letters emails and phone calls. I have attended meetings of irate ratepayers. I have received political threats. I have even received death threats. I accept and understand why people are angry at what their council has done but the problems must be addressed. None of these threats will deter me from exercising my judgment as best as I can in the interests of all constituents in this district. Constituents should expect this of their MP not expect their MP to steer away from dealing with the tough issues and to bow to threats however justified some people may feel in voicing them. Although the Mangawhai Residents and Ratepayers Association members acknowledge that this bill is required to fix up these irregularities they want it done their way. I encourage them to explain to the select committee what their way is.Like so many in the Kaipara people are angry at the council’s handling of the Mangawhai waste-water scheme that has burdened this district with enormous debt. It is important to note from the outset that the $30 million decision to expand the sewerage scheme is not subject to this bill. In 1999 the council estimated the cost of the Mangawhai waste-water scheme at $11 million. In 2003 it was estimated at $17 million. By March 2006 it was $35.6 million. In October 2006 the council approved a new contract for $58 million. The final actual cost was $62 million.Although there have been some changes in the scope of the scheme from what was envisaged in 1999 the question is how the council got this so wrong. The Office of the Auditor-General is investigating this and whether any individual or organisation is culpable. It would be wrong of me to comment further while this inquiry is under way but I await with great interest the outcomes of this inquiry including it must be said the role of the Auditor-General’s own office and that of Audit New Zealand as the council auditor. The public and the residents of Kaipara depend on Audit New Zealand as the council’s auditor ensuring compliance of their local authority with the law their standards of accounting and the necessary probity and financial prudence. Annual audits of public bodies are required for very good reasons.There are some serious questions that must be answered here. How could the cost of the scheme go from $11 million to $62 million with such limited consultation with its ratepayers yet the council still got clean audits? How could Audit New Zealand sign off on the long term council community plan when there were major inconsistencies between the financial projections in the plan and the funding arrangements being put in place to finance the project? How could Audit New Zealand also sign off on the long-term council community plan that relied heavily on the collection of development contributions when there were no development contribution policies in the plan? Similarly the long-term council community plan was signed off when the rates needed to fund the Mangawhai waste-water scheme were not even included in the funding impact statement that is critical to the council being able to set the rate.How can it be that the council can have such deep-seated and longstanding non-compliance and other fundamental financial mismanagement issues and still get clean audits year after year when people in that district were saying that there were problems? Why were none of the growing financial performance issues of the Kaipara District Council noted in successive audit reports? Have the auditors failed the ratepayers of Kaipara? If so that failure must be addressed. It must never happen again and accountability for failure must be sheeted home.The Kaipara has been caught in a situation where it needs Parliament’s help and the expeditious processing of this bill is important for the Kaipara to move on. I ask that the Local Government and Environment Committee award this bill priority. I commend it to the House.