Sio William: Kaipara District Council (Validation of Rates and Other Matters) Bill — In Committee Third ReadingText is incorporated into the Bound VolumeSio William: Kaipara District Council (Validation of Rates and Other Matters) Bill — In Committee Third Reading[Sitting date: 04 December 2013. Volume:695;Page:15269. Text is incorporated into the Bound Volume.]Su’a WILLIAM SIO (Labour—Māngere): Talofa lava Mr Chairman. Thank you very much for the opportunity. On 6 September 2012 commissioners were appointed following the completion of work by the review team that was put together by the Minister of Local Government in June 2012. That review team was asked to assess the financial management and governance challenges facing the Kaipara District Council. The review team concluded that the challenges were beyond the ability of the mayor and councillors to manage. Elected councillors then agreed that the Minister of Local Government would appoint commissioners. It is the commissioners’ work that has led to the Kaipara District Council (Validation of Rates and Other Matters) Bill being tabled in the House as sponsored by Mike Sabin.Tonight there is a need for this Committee to help the people of the Kaipara District the people of its many small towns and villages people who work hard day in and day out to carve out a life for themselves in Kaipara. There is a need for this Committee to help them and a need for the Committee to help the council the commissioners and the wider community of people who live in that area and need to draw a line somewhere somehow under this deeply sad and woeful affair. I would ask this Committee just to be careful with speeches as the decisions that we are making tonight will have painful ramifications for some ratepayers in the Kaipara District. I do not believe that politicising this affair is going to be helpful in any way.The Labour Party will support this bill. We have no choice but to do so in order to assist in drawing a line so the Kaipara District can move forward and look ahead. If we do not pass this bill Kaipara District will continue to carry about $17 million of rates plus the level of rates that are currently being withheld as a burden on all the ratepayers there. In addition the council currently has $77.5 million of external debt of which$52.5 million relates to the waste-water scheme. This debt is currently due to expire in July 2014 and carries the favourable interest rate margin of 55 points. Not passing this bill puts that debt at risk with the local government financial authority. It puts at risk the services the people of Kaipara continue to receive today from their council. In addition there are other costs that continue to add up the longer this bill is delayed such as the loss of the New Zealand Transport Agency funding of about $450000 per month the increased debt-renewal cost of about $50000 per month the working capital cost of about $30000 per month and a $400000 one-off cost to amend the long-term plan if this bill is not passed. It would irresponsible for us to delay this bill any further as we would then impose this cost upon all Kaipara District Council ratepayers.The Labour Party has deliberated on this bill on a number of occasions before arriving at its final decision. It has been difficult because of relationships we have with ratepayers who oppose this bill and the need for us to do the right thing for everyone in the Kaipara District. We considered our position a few times as information was made available to us from Government advisers commissioners individual ratepayers the leaders of the Mangawhai Residents and Ratepayers Association and its legal counsel. We found ourselves upset and angry with the way the previous councillors mayors and management failed on so many grounds to meet their legal and managerial responsibility towards the people of the Kaipara District. We sympathise immensely with the Mangawhai Residents and Ratepayers Association the way it felt about the whole process that was undertaken and its need to pursue the legal avenues available to it. We met and received submissions directly from some of its members including Mr Bruce Rogan its chair. We also met with its legal counsel. Some of the communications we received from the Mangawhai ratepayers group were very thoughtful deliberate and considered. Other communications I received reflected I believe the tremendous stress those people were under. They have every right to feel the way they do.The Labour Party sought from the Government and its commissioners relief for ratepayers by way of an amnesty of the penalties for rates withheld. We are pleased that the commissioners have agreed to provide this rates relief on penalties and extend this rates relief to ratepayers in relation to the Mangawhai community waste-water scheme to 1 January 2014. A line has to be drawn under this relief to allow all Kaipara ratepayers to move forward. This relief will cost approximately $1 million which will be borne by all Kaipara District Council ratepayers.It would be wrong for this House given the information we received from commissioners and Government officials to entertain a scenario where the rates were not validated and where the council would be required to refund about $17 million of rates affected by the irregularities to the 4812 properties that have paid them. Under this scenario the council would still be required to recover this income in the 2014-15 year in addition to the administration costs plus the estimated interest costs over the period between refund and full payment.The net effect of that scenario on sample properties would see the residential and commercial properties in Mangawhai that had paid the full capital contribution to the waste-water scheme get a refund on average of about $5065. But their 2014 rates would on average be $5400 higher. Where the ratepayer entitled to the refund remained the ratepayer for that property they would be $343 worse off. Where the property had changed hands the original ratepayer would receive a windfall of $5065 while the new ratepayer would have to pay an extra $5408. Those ratepayers who paid a first instalment of $676 of a capital contribution to the waste-water scheme in 2013-14 would get a refund on average of $1853. But their 2014 rates would on average be $2151 higher—a difference of $298.We acknowledge the whistleblowers who brought attention to this woeful saga. We heard strong submissions from submitters absolutely opposed to this bill. There were strong allegations made of corruption collusion and conspiracy to commit fraud. I accept that it was easy to make those allegations given the way the council behaved with backroom deals and workshops a lack of proper systems in place a lack of in-house staff expertise substandard work by the auditors a reliance on outside contractors and consultants and a lack of best practice. There are so many people we can blame for this but we all end up having to pay especially the people of Kaipara. Kaipara has the waste-water scheme that it needed and it works though through bad decisions mismanagement and incompetence it has cost the people of Kaipara more than it should.I agree that someone or all those people should be taken to court. We therefore at that time sought a commitment from the commissioners that the right to bring proceedings be unaffected by this bill. We are pleased that the amended clause 14 extends this right to include not just the council; any other person can “bring proceedings against any person arising out of or in connection with any actions or omissions associated with matters validated by this Act.”As I said at the beginning of my speech we need this House to help the people of Kaipara draw a line under this woeful saga. I know that there are people listening in Kaipara who will not be happy with the statements I have just made on behalf of the Labour Party but notwithstanding that I accept they have every right to feel the way they do. I was one alongside other members on the Local Government and Environment Committee who was actually waiting for the Auditor-General’s report to identify and provide evidence that would enable us to take somebody to task over this whole sad affair.There are many to be blamed and they include the residents of Kaipara who had the democratic ability to challenge their councillors and who did put up new councillors. The chief executive officer of the time according to the feedback I have received was not a member of any professional organisations and therefore did not have access to best practice. The fact was that the council did not have in-house staff and although it lauded the fact that it had reduced rates for many many years it was able to achieve that by the sacking of skilled staff and by the reduction in the number of skilled staff. Therefore it did not have in-house expertise that it could rely on and it ended up being captured by consultants and contractors.Kaipara has a population of about 20000 people living in numerous towns and villages. It is a community that has a strong spirit with numerous local clubs volunteer organisations a Rotary club an art festival beautification groups and a strong Dalmatian club. Kaipara District deserves to move forward and it is my hope on behalf of the Labour Party that by passing this bill we are able to give it that opportunity.