Christchurch City Council (Rates Validation) Bill — First ReadingText is incorporated into the Bound VolumeChristchurch City Council (Rates Validation) Bill — First Reading[Sitting date: 28 May 2014. Volume:699;Page:18422. Text is incorporated into the Bound Volume.]Christchurch City Council (Rates Validation) BillFirst ReadingHon NICKY WAGNER (National—Christchurch Central): I moveThat the Christchurch City Council (Rates Validation) Bill be now read a first time. I nominate the Local Government and Environment Committee to consider this bill. I have been asked to be the member in charge of the Christchurch City Council (Rates Validation)Bill which sets out to validate the rates irregularities that came to light for the council last year. Each June the Christchurch City Council resolves to set its rates for the next financial year beginning 1 July. Since 2004 the wording used for the resolution has been the same or similar. However at the beginning of August last year the Department of Internal Affairs advised council staff that the council resolution that it passed in 2013 did not meet the requirements of the Local Government (Rating) Act 2002. The council did not pass a specific resolution stating the due dates for payment or a resolution to authorise the imposition of penalties on unpaid rates. In other words when it simplified the language back in 2004 it left out these important parts of the resolution.Section 24 of the Local Government (Rating) Act requires a local authority to include in its rating-settings resolution each year “the date on which the rate must be paid or if the rate is payable by instalments the dates by which the specified amounts must be paid.” Although on occasion the information has been made available in the council’s rating policies and funding impact statement it has not been included in resolutions passed since 2004. So the information has been available but it has not actually been in the resolution. Section 57 of the Act enables a resolution to be passed that authorises the addition of penalties to rates not paid by the due dates. This resolution must be made no later than the date on which the local authority sets its rates for a financial year. It must also state how the penalties are to be calculated and the dates on which they are added to the amount of the unpaid rates. Again although this information had been available to ratepayers it had not been included in the resolutions passed by the council since 2004.As a consequence of these irregularities relating to the payment dates of the rates and the imposition of penalties the council undertook a thorough review of all its resolutions that had happened since the rates were set in 2004. This review identified a number of other technical irregularities in relation to the setting of seven targeted rates and the uniform annual general charge. Again although the funding impact statement for each year included information about how liability for the targeted rates was to be calculated—for example as a fixed amount per rating unit per separately used or inhabited part of a rating unit or per connection—this information was not included in the rates resolution. Although the funding impact statement for each year also indicated how the uniform annual general charge was to be calculated generally as a fixed amount per separately used or inhabited part of the rating unit this information was not included in the rates resolutions.The council was able to rectify the situation for the 2013-14 financial year by resetting its rates under section 119 of the Act. However that particular process is not available to correct similar issues with regard to rates set in previous years. Parliamentary intervention by way of a local bill is required in order to validate the rates set payment dates and penalties imposed. The local bill before you is needed to rectify the situation for the council. Parliament has previously validated rates irregularities for other local authorities including the Kaipara District Council and the Tasman District Council.This local bill the Christchurch City Council (Rates Validation) Bill is a short and focused bill. It will achieve the following outcomes as if those resolutions were made on the date that the council set the rates in each year from 2004-05 to 2012-13. Clause 5 validates the payment dates for the rates. Clause 6 validates any penalties added to the rates. Clause 7 declares all money received by the council in payment of the rates and any penalties paid in respect of those rates to be and to always have been lawfully paid to and received by the council. Clause 8 provides that any part of the rates or any penalties payable in respect of those rates by virtue of clause 7 that have not been paid to the council on or after the commencement of this bill are lawfully payable to thecouncil and may be recovered by the council as if the rates and penalties had always been lawfully payable. Clause 9 validates the specified rates. The specified rates comprise the council’s uniform annual general charge and seven targeted rates where irregularities had been identified in terms of section 23 of the Act.This bill validates rates that have been incorrectly set since 2004. It is not about their being calculated wrongly and it is not about the wrong amount of rates; it is all about a technical irregularity in the wording of the resolution. Thank you.Su’a WILLIAM SIO (Labour—Māngere): Talofa lavailau afioga lefofogafetalai. Talofa lavai Samoa o looafifio ma papaaaoiKalaisetete leaai oteufugalaau. To all the Samoans living in Christchurch the city of gardens of flowers greetings to you one and all.The House has heard from the promoter of the Christchurch City Council (Rates Validation) Bill the Hon Nicky Wagner. This is one of those bills that again places us between a rock and a hard place. I acknowledge the fact that there were irregularities that occurred in the resolutions setting the Christchurch City Council rates for the financial years 2003-04 to 2012-13.This bill now goes to the Local Government and Environment Committee. I would invite all people in Christchurch to take the opportunity to make their feelings known and maybe make their feelings known not just about the rates validating bill but also about the general state of affairs. I know that some see that Gerry Brownlee needs to ensure that all the rebuild costs to the Crown are accurate and that the figures were not underestimated so that this Government could achieve its 2014 wafer-thin surplus. Gerry Brownlee had an agreement with the previous mayor Bob Parker to not do an independent audit of the costs because he knew the estimates they had would not stack up. This is putting the council’s financial position at risk.We support this bill through its first reading. I would invite all members and citizens of Christchurch to take the opportunity to submit on this bill and make their views known to this Government about the lack of action that they are seeing in the rebuild there. Thank you.MAGGIE BARRY (National—North Shore): Talofa lava to you Mr Assistant Speaker and to all of us here as I rise to speak to the Christchurch City Council (Rates Validation) Bill. It is at its first reading. This is a bill that we do not know very much about at this stage but in our colleague we trust. The Hon Nicky Wagner who ably led the Local Government and Environment Committee for some time has put this bill down for its first reading and has indicated that it needs to be done because it needs as other bills in the House have to correct the problems of the past. Unfortunately in one 3-year term having three validations of rates is an unfortunate situation because many would say that it is something that really ought not come to Parliament. We have had Kaipara we have had Tasman Bay and now we have this bill. But it needs to proceed through the House as the Hon Nicky Wagner has said to rectify this situation for the council.We need to revalidate the dates for the rates from 2004-05 to 2012-13 and any of the penalties added to the rates. I would imagine that there will be some complexities around it. This is a bill that affirms all money received by the council in payment of those rates and any penalties paid in respect of those rates to be and always to have been lawfully paid and received by the council. So we have a situation that Parliament needs to oversee and the passing of this piece of legislation is an important thing to do. There has of course been a rich background to it which I really do not have the time to go into in this particular reading but I will certainly do so in a later call. I think it is important that we address the issues in a general sense today and then as it goesthrough its readings and through the select committee we can examine it in more detail at that time. I commend this bill to the House. Thank you.POTO WILLIAMS (Labour—Christchurch East):Fa‘fetai mo leavanoa Mr Deputy Speaker. I understand that there is often a little bit of reluctance when we are bringing retrospective legislation to the House but I also understand that there is a precedent for Parliament validating rating irregularities through a local bill as is the case today. Today we are talking about theChristchurch City Council (Rates Validation) Bill. I for one would not want to obstruct any efficiency of the council’s ratings collection or cause any issue for the council in conducting its usual business affairs with regard to rates. I think that this bill does do what it needs to do in terms of ensuring that the anomaly with the rates payments from 2003 through to 2013 that potentially could mean that those rates are invalid will be corrected so that the council can validate the payment of rates and also validate the penalties added to those rates.I understand that it also declares that all money received by Christchurch City Council in rates and penalties is lawful that any unpaid rates are therefore recoverable and that specified rates such as the uniform annual general charge have been identified according to section 23 of theLocal Government (Rating) Act. This bill safeguards anyone who might be taking action against Christchurch City Council to deem that the rates collected were unlawful. It is an unusual step but it is unlikely that action will be taken if this legislation is passed to correct that.It is a short and simple bill. I do not want to talk too long on it. It does do what it is required to do in terms of validating those rights and penalties as required and it puts the Christchurch City Council back into position. The only thing I would comment on is that it does highlight that it is possible to have an appropriate relationship between a council and central government. I would hope that as Christchurch continues towards its rebuild the relationship continues though the complexities are there.So I just want to say that we commend this bill in its first reading and I look forward to seeing it progress. Thank you.EUGENIE SAGE (Green): Talofa lava Mr Deputy Speaker. This will be a short call on the Christchurch City Council (Rates Validation) Bill. I have been in this House for less than 3 years but this is the third time that I have spoken on a bill where a council is asking Parliament to pass retrospective legislation to validate the rates that it has set because there have been errors or irregularities in the way those rates were set. This highlights a point that the Green Party has made repeatedly in relation to the Local Government Act 2002 Amendment Bill (No 3) which the House was debating earlier this week and will debate again tomorrow which is that the Minister of Local Government needs to instruct the Department of Internal Affairs to provide much clearer guidance to local authorities around New Zealand and a template of the form of rating resolutions to avoid us having to consider retrospective legislation to validate those resolutions when they have been incorrectly passed. The Government’s reaction in its changes to local government legislation is to give the Minister more power to intervene to constrain the way in which local authorities operate and to put more criteria in legislation that they have got to assess their actions against. But it has not been to provide the guidance through the Department of Internal Affairs to local authorities on things as basic as how to set rating resolutions.This bill as others have alluded to validates the problems that arose in the way the council set rates between 2003-04 and 2012-13 and the way in which it did not correctly impose penalties on unpaid rates. Research that the Parliamentary Library has done shows that the average bill that is considered by Parliament costs $1.43 million. Every hour that Parliament sits costs about $20000. So we are having to spend valuable public money and parliamentary time on this legislation to correct errors in rating when ifadequate guidance was provided by the Department of Internal Affairs we would not need such bills. The Green Party will be supporting the legislation because without itit would make the Christchurch City Council vulnerable to legal challenge and that council is already struggling with quite major financial challenges so we do not wish to add to that. But if there was adequate guidance from the Department of Internal Affairs we could avoid the need for such retrospective legislation which none of us supports.ANDREW WILLIAMS (NZ First): I rise to take a call on behalf of New Zealand First on the Christchurch City Council (Rates Validation) Bill. This is as we have heard the third bill during this term of Parliament to validate some actions of a local authority where there has been an administrative error. Just recently we did the bill with the Tasman District Council where again the council had not properly gazetted the information. In that particular case it was a map that it had not included for the ratepayers which invalidated the rates it had set. In the case of the Kaipara District Council bill—we all know the history of the Kaipara one—again the council had not consulted with the people and advised them of the increasing amount of rates required and the charges that were going to go through for the increased sewerage system.But in this particular case the Christchurch City Council simply has not passed the required resolutions under the Local Government (Rating) Act to ensure that those resolutions were passed by the governing body of Christchurch so that then in turn the rates demands that were sent out to the people of Christchurch were valid. In that respect it is a simple administrative error. It is somewhat surprising that it would occur in a city the size of Christchurch and one does wonder how it would have slipped through because every authority knows that it is required in terms of passing its resolutions in order for the management to then carry out the policy. In effect the management was carrying out acts in terms of the rates and sending out things to the ratepayers that had no legal substance to them. So this bill is validating that.It went on for a period from 2003-04 right through to 2012-13—a considerable period of time. Again I wonder why it took so long to be picked up. It should have been through the auditing processes and all the various other processes. I would have expected that it would be picked up by somebody both within its internal audits and by external audits looking at how it had structured its rating process. However it was not and we are now having to put it right.At the end of the day nobody is wrongfully affected by this. The rates themselves were valid. They were correct and true. This bill just simply makes sure that they were legally set. New Zealand First has no hesitation in supporting this local bill and we commend it to the House.Hon PHIL HEATLEY (National—Whangarei): I rise in support of the previous speaker Andrew Williams as is my habit and I back him 100 percent on this Christchurch City Council (Rates Validation) Bill. It is true that this is the third piece of validation legislation that this particular committee the Local Government and Environment Committee will be dealing with in the course of this year. As was said the Kaipara District Council (Validation of Rates and Other Matters) Act was one. Was Tasman? What was the other one?Hon Nicky Wagner: Kaipara.Hon PHIL HEATLEY: The Kaipara one the Tasman District Council (Validation and Recovery of Certain Rates) Act and now of course the Christchurch City Council (Rates Validation) Bill.It is true that each June the Christchurch City Council resolves to set its rates for the next financial year which begins on 1 July as is normal. Since 2004 the wording used for this resolution has been the same or similar. But at the beginning of August the Department of Internal Affairs did advise council staff that the resolution passed thisyear did not meet the requirements of the Local Government (Rating) Act. Although information about the rates to be set was contained in a schedule or appendix that was referred to in the resolution the council has not passed resolutions stating the due dates for payment or authorising the imposition of penalties on unpaid rates. This has been rectified for the 2014 year by the council resetting its rates under section 119 of the Act. However that process is not able to correct similar issues with regard to rates set in previous years hence the regulatory intervention of this local bill which Andrew Williams supports and I in turn support him.RINO TIRIKATENE (Labour—Te Tai Tonga): Kia ora Mr Deputy Speaker. I am pleased to speak at this first reading of the Christchurch City Council (Rates Validation) Bill particularly as I am the only Māori MP to cover the great city of Christchurch and the district of the Christchurch City Council. I support this bill but it is regrettable that this legislation is coming through the House. I acknowledge my parliamentary colleague Nicky Wagner for her work in sponsoring this bill but it is regrettable that yet again we are having to tidy up the blunders and all the faux pas that are going on with certain councils around the country. How hard can it be? How hard can it be for a council when it actually goes through the procedural aspects of approving the rates to not do this? And not just on one occasion—it actually goes back 9 years. For 9 years it failed to follow the proper procedure or proper resolutions that were passed which has led us to this situation where we are now having to tidy up these messes.I think this is a real wake-up call for councils around the country to get their act together. These are not small organisations. The Christchurch City Council is the council of our second-biggest city metropolitan area in the country. It is not a very small rural provincial-type local authority. We would expect that this council would have some smart people on board who would be there to make sure that the council at least ticks the appropriate procedural boxes when it is passing resolutions to approve the rates. It is regrettable that we have to resort to tidy-up legislation. We should also think of the people whom it has impacted on and the fact that this has caused people to pay rates or pay arrears or whatever they have had to do—meet their obligations and meet their financial commitments in terms of paying rates to the council—when for 9 years the council failed to properly approve the levying of those rates or those arrears and penalties. So we would hope that this would be a wake-up call for the council.I know that the solicitor who is now involved in crafting this legislation is from a very good firm SimpsonGrierson which I used to work for many years ago and I am pleased. That firm is an expert in local government. I would hope that councils around the country would get good advice or get people who know what they are doing when councils are holding these meetings in order to make sure that they get things procedurally right. As you know for everything that happens in this place of Parliament there is a tikanga there are rules and there are procedures that we must follow. So if it is good enough for our Parliament it is good enough for our local authorities around the country to ensure they get it right. We are not talking about lay people. I would expect that the chief financial officers the chief legal counsel and the chief executive—we are talking about highly paid public servants—would have the skills the ability and the wherewithal to actually get the procedures right when the councillors meet to approve these rates.What I fear is that this is just the tip of the iceberg. I fear this is the tip of the iceberg because we do not want to be using more of Parliament’s precious time to be fixing up the faux pas that have been conducted by incompetent staff from councils around the country. Having said that I do support this bill because we need to get this matter fixed. Kia ora.JACQUI DEAN (National—Waitaki): I rise to take a call on the Christchurch City Council (Rates Validation) Bill. I take exception to the member who has just resumed his seat Rino Tirikatene referring to council staff as incompetent. I absolutely reject that contention. At the same time I acknowledge that yes there is work to do to validate some incorrectly set rates resolutions but I do not think it is helpful to then extrapolate out and call the sector incompetent. I do not think it is true and staff are not here to defend themselves. Well I will defend them. I think the local government sector is a very good sector. It does a marvellous job on behalf of its ratepayers and all New Zealanders. We do have this matter to deal with but I do not think we should tar them all with the same brush as did that thoughtless interjection we have just had.Hon NICKY WAGNER (National—Christchurch Central): I would just like to recap to the House on this Christchurch City Council (Rates Validation) Bill. What it does is it validates irregularities that came to light for the council just last year. Since 2004 when the rates resolution was simplified the council failed to specify the rates payment dates the penalties charged how penalties were calculated and the dates by which penalties would apply. Let me make it clear. All this information was available elsewhere but because it was excluded from the resolution the rates were invalid.In 2013 when this issue came to light the council undertook a thorough review of all its rates resolutions and discovered a number of other technical irregularities. These irregularities were in relation to the setting of seven targeted rates and the uniform annual general charge. Again the information was available. It was available in the funding impact statement and that gave all the details about the charges and how they were to be calculated but it was not specifically stated in the rates resolution. Again let me be clear. There is absolutely no problem about the calculation of rates and there is no problem about the amount of rates that needed to be collected so nobody has missed out through these irregularities. This is a very simple bill. The irregularities were identified by the Department of Internal Affairs and the council has acted pretty swiftly to rectify its errors through this bill.I would just like to reflect on our previous validation bills. This bill is quite different I think. Members have spoken of their dismay at having to process another validation bill and I do concur with that. It is an expensive process to put these bills through the House. But I think this is a slightly different situation than that of the Kaipara District Council or the Tasman District Council. In 2004 when the council made the changes to the resolution it did it in good faith. Those changes were made deliberately. The council was looking to simplify and to make resolutions easier to understand. It was aiming for a simple plain English resolution that everybody could understand and follow. Unfortunately in its haste to make it easy it left out essential information. But there have been no adverse consequences of these errors. I believe that the Christchurch City Council has acted promptly when errors have been found in its work and I commend this bill to the House.A party vote was called for on the questionThat the Christchurch City Council (Rates Validation) Bill be now read a first time.Ayes119New Zealand National 59; New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 3; ACT New Zealand 1; United Future 1.Noes1Mana 1.Bill read a first time.Billreferred to the Local Government and Environment Committee.