Simpson Scott: Christchurch City Council (Rates Validation) Bill — In CommitteeText is incorporated into the Bound VolumeSimpson Scott: Christchurch City Council (Rates Validation) Bill — In Committee[Sitting date: 06 May 2015. Volume:705;Page:3284. Text is incorporated into the Bound Volume.]SCOTT SIMPSON (National—Coromandel):It is a pleasure as chairman of the Local Government and Environment Committee to take a call on this bill as it progresses through the House through its Committee stage. I want to acknowledge the local member the Hon Nicky Wagner who has ably supported and sponsored this bill under difficult circumstances in a way. I do not think that any local member takes any pleasure at all in bringing to the House a piece of validating legislation. In the second reading we heard from a number of people myself included who were I think unhappy about the prospect of us having to consider it. This is quite a succinct short and pithy bill that actually fixes irregularities that relate to payment dates for rates and the authority to impose penalties on unpaid rates that occurred through a mistake albeit an honest mistake made by the Christchurch City Council.This is a local bill. The irregularities as the sponsoring member indicated actually were victimless in terms of nobody having suffered financial loss or cost. But the council has really just dodged a bullet because if in fact any ratepayer had decided to bring legal action against the council during any one of those 10 years before the error was discovered there would have been significant potential for financial loss not only to the council but to the wider ratepaying group. The Christchurch City Council failed to state in its rates resolution that the rates were payable by instalments and not only that but what the payment dates for those instalments might be and what penalties if there were to be any might or might not be added. So it failed to state some very basic things. I hasten to add that these errors occurred some 10 years or more ago—several chief executive officers ago—and the opportunity I guess to seek retribution from the people who were responsible for ensuring that the errors did not occur has long since passed.However notwithstanding that it is my view that the council should perhaps have been a little more contrite in terms of its submission to the select committee. We went and heard the submission. There was only one submission; this was it. It was just a mere two pages from the council. It was the only submission that was received. I have to say on behalf of the committee that we were singularly underwhelmed by the presentation received from the council staff and councillor who presented to the select committee in Christchurch on the day that we had the hearing.Sections in the bill are actually quite short. Clause 5 validates the payment dates for the rates in a way that did not occur during the rates motion. Clause 6 validates any penalties that may have been added to those rates through the error and omission that took place some 10 years ago. Clause 7 declares that all money received by the council in payment of the rates and any penalties paid in respect of those rates during the period in which the error was unidentified will in fact be validated and that there will be no potential for recovery from ratepayers who may have felt that those rates had been—as they were—collected constitutionally in terms of legality illegally by the Christchurch City Council.Clause 9 goes on to validate the specified rates. These comprise the council’s uniform annual general charge and seven targeted rates where irregularities have been identified in terms of section 23 of the Local Government (Rating) Act 2002. These resolutions were made so that the purpose of this bill is to validate those resolutions so that the status would be that the previous resolutions would then be validated from 2004-05 through to the financial year 2012-13.So I think that it is fair to say that in terms of the impact of this error that occurred in Christchurch City the council is very lucky to have got away as lightly as it did. This was during a period of time when the chief executive officers were being paid most generously by the ratepayers. They were negligent in their role in ensuring that the correct motions were passed that the correct financial motions were made available to the elected councillors. I for one felt very unhappy that the council actually showed no contrition at all for that. I acknowledge that the current councillors and current council staff were not personally responsible but not withstanding that there were very significant errors. If the errors had occurred in other jurisdictions where members of the public and ratepayers had been perhaps testing of this situation then there would have been very significant financial cost to the council and ratepayers. The legal cost alone would have been enormous.This piece of legislation affirms that 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 and received by the council. So what that means is that there will no longer be an opportunity for any disgruntled or offended ratepayer to bring a retrospective piece of litigation against the council in a way that may have allowed the council to become further financially compromised if such a piece of litigation had taken place.Although the funding impact statement for each year of the errors included all the information that was required—so on the actual rates bill the correct information was there—notwithstanding that the formal proper motions had not been passed by the elected councillors the people who are elected by the good citizens of Christchurch to ensure that local government legislation is enacted and passed according to law. That did not occur and those people were potentially very vulnerable. So this piece of validating legislation ensures that the errors and omissions made by staff and councillors long gone are in fact put right.As other speakers have said this House does not like to consider these sorts of validating pieces of legislation. Regrettably we are all too often put in a position where errors of this sort at a local government level do occur and it is up to a local member who has no real opportunity to put right the error to come to the House seek the time of the House seek the goodwill of a select committee and then put it to the House—where time and effort is occupied at not inconsiderable cost to the taxpayer—to ensure that things are put right on behalf of the innocent ratepayers of Christchurch.I hasten to add that this is not a small territorial authority. Christchurch City Council represents one of the largest council operations in the country. The level of expectation that rests upon it is surely at the high end of the spectrum in terms of compliance in terms of fulfilling its role as local body legislator and in terms of protecting the rights and interests of the ratepayers. So I am not in any way going to discount the roles and obligations of smaller jurisdictions of smaller councils but I think that sometimes they may not have the same access to legal counsel and the same access to professional advice and information that the very large councils do.Christchurch City Council is a very significant enterprise. It is an enterprise that is of large size and volume and that pays its senior staff extraordinarily well in order to get things right. On this occasion over a period of not 1 year not 2 years not 3 years not 4 years but in fact a whole decade these errors were not spotted. These errors were not spotted by the highly paid professional staff of the council and then the councillors were not made aware of it. Perhaps worse to add insult to injury nor was the error spotted by the auditors who were also charged with ensuring that these kinds of errors do not slip through the cracks.This is an unfortunate piece of legislation. It is a piece of legislation that I would prefer as chair of the select committee we did not have to bring to the House.