Letter to the Editor
Wellington LIVE – One Network

Dear Editor,

Following on from the excellent letter from Karl Tiefenbacher I must write to inform readers that Wellington City Council is not alone. Hutt City Council is just as bad. They share the same root cause – Labour and Green councillors running amok with other people’s money and with not an ounce of business experience between them. They both sign party pledges to faithfully implement Labour and Green policies around the council table, irrespective of whether those policies are supported by ratepayers. In both cases the CEO withholds information from councillors and councillors don’t question this – the CEO has the right to lodge a code of conduct complaint against councillors and council officers have been ordered not to speak directly with councillors.

A good example is the case of the Naenae Pool. See below a Facebook post I’ve just published on my ex-councillor FB page – www.facebook.com/ChrisMilneExCR.

ANATOMY OF A 17% RATES INCREASE – part 1

Gullible councillors deliberately misled by council officers

Councillors were told the Naenae Pool funding requirement in the 10 year LTP was $11.4m but the true figure is $45.6m.

Naenae Pool is going to be a massive financial lemon for ratepayers, but you wouldn’t know that from information provided to councillors. During the LTP process councillors were told only that costs and revenues had been revised but they weren’t given any detailed figures. I submitted an official information request asking for this information – see the PDF for the response.

Councillors have never wanted to know what the pool’s operating model looked like. When I was a councillor my requests for this basic information, enabling a reasoned debate, were denied many times by Mayor Campbell Barry. Other councillors never intervened to pressure for this information. Councillors therefore signed off the plans without any idea of the cost to ratepayers. This is a huge governance failure and those councillors responsible for the debacle should retire at the next election.

But the Mayor and officers cannot hide forever. Now the information is to hand and it’s worse than expected. For starters, the pool will make a loss over 10 years of $11.4m, and that’s before charging for depreciation and interest costs. In the past, all of those costs were included in financial reporting for pools, and the information was freely supplied to councillors (see photo). Now they have been omitted in what can only be described as cynical window dressing, complete with the knowledge that councillors are either too ignorant to question the figures or are spending other people’s money so they don’t care or they are too frightened to rock the boat.

Readers who have been following this issue will know that under the council’s financial policies, depreciation and interest costs are “operating costs” and must therefore be fully recovered via rates.

Once you include the full costs of the pool, the drain on ratepayers is over $45.6m over the 10 year LTP period.

Breakdown of 10 year costs:
Funding requirement as provided to councillors – see official information response: $11.4m
Depreciation: $15.8m (see model previously supplied in past Naenae Pool posts)
Interest 4.5% on $41m (excludes $27m shovel-ready Covid subsidy) = $18.5m
Total: $45.6m

This is the first in a series of articles explaining why we have a 17% rates increase. Heads up – the PR campaign using talking points supplied by LGNZ to councils all over New Zealand says it’s to pay for years of neglect. The true causes are much closer to home, and make uncomfortable reading. We have a group of councillors (one or two excepted) who would bankrupt a sports club if left in charge, but they have been unleashed on the city, and are about to be crushed by a 270% rates increases over the next 10 years. Under Campbell Barry our debt has blown out from about $120m to $540m. It is forecast to increase to $1 billion. The city is heading for financial oblivion.

Chris Milne