Your Say

3 Waters Reform and More

04/10/2021

Water continues to cause concern around the region. I have had some 500 emails calling for our Council to reject the Government’s Three Waters reform package. Oddly, not a single email in support.

Incidentally, I use the term Three Waters rather than Three Water as someone pointed out would be more linguistically correct, because that is the term Government use. I am no linguist to debate the rights and wrongs of it.

Around the country we have had Councils vocalising concern over the honourable Mahuta’s reform. Hawkes Bay Mayor’s want to keep the reform in-house. Most of the South Island Mayors have been consistent with the view that it is not currently something that will work for them

In fact some Christchurch Councillors have called for the resignation of the honourable Mahuta

Unlike Nelson City Council, that had a Mayor and a CEO on the working party for the 3 Waters Reform, Tasman voted to send a message that we were unlikely to support the reform in its current form.

What is wrong with where Minister Mahuta is taking the reform?

Firstly, we have to ask if New Zealanders want gold plated 3 Waters systems. Or are we mostly happy with the provision of water that sometimes has a pipe burst, or very occasionally (like once in my lifetime) may put people’s health at risk. Yes, there are places that haven’t delivered as well as they could have, and we can all do better. But would you rather that or a gold plated solution that only the elite few can afford to drink from or flush away?

That is the first question that should have been consulted on. Because when we look at the satisfaction survey that Tasman polls the ratepayers with the overall satisfaction of our water supply service is 86% our Wastewater is at 98% and our Storm water is at 93% positive satisfaction levels.

The next issue with the 3 Water Reform is that it is delivering on the Government’s He Paupau agenda, which is something that was never campaigned on and certainly never consulted on. It will see the Maori interests gain a 50% and controlling share (as a 75% majority of stakeholders is required for a decision) of the Governance of all future 3 Water delivery.

Just like all New Zealanders, Maori have contributed to the establishment of the current Council controlled infrastructure. Just like all New Zealanders they have a say in who is elected to Council and like all New Zealanders can run for Council. In recent years they have had even more say as Council has to consult with Iwi (usually prior to the general ratepayer consultation) over any significant decision. But now, we are told that half the board members of the new entities controlling the 3 Waters will be Iwi appointed. Some have suggested that this is not democracy as their representation far out-ways their population.

Representation in the new entities is sparse enough for the general ratepayer without race based representation. It is likely that the three Council’s in the top of the South Island would have one appointed (non-elected) representative between them. Good luck getting a hold of them to pitch your case on a local issue, and then seeing how much voice they have at the next board meeting.

Centralisation will lead to a greater example of what we have now. With only so much budget, and so many staff hours, decisions will have to be made on how to best spend their money. Obviously, they will start with projects that deliver the most bang for buck – that is that which benefits the greatest number of people. In our case that would most likely be addressing the woeful Wellington water situation, just as Richmond currently gets projects brought forward with regular monotony because of the great gains we can make by combining projects or working with developers (sorry Tapawera, Murchsion, Ngatimoti, Collingwood).

Deliverability of the gold plated 3 Waters package is about as likely as Kiwi Build providing 10 000 new houses, or Auckland getting light rail or a harbour cycle bridge, or Ardern reducing child poverty (as something she did campaign on). There is physically not the availability of engineers or contractors in the Country to deliver the reform in any kind of timely manner.

And all of that would depend on someone funding the work. Some suggest that the new entities should be paying market rates for the infrastructure. I have news for you, they have no money, they just have an ability to borrow money – you the water user will be paying for the purchase and all the horrendous amounts of interest generated from the borrowing to pay you the ratepayer for the assets. On top of that the huge debt that will be racked up to upgrade the services to a gold plated standard.

Even more scary would be the thought that the Council whom have dug us into the best part of a $300 million hole would be given a large portion of the money back to lose it all over again! Meanwhile you are liable for both amounts.

Finally, let us also speak of the fact that NONE of the models we are basing the 3 Waters reform on have a 3 Water system. At best they have a 2 Water system that excludes Storm Water. The Storm Water component from the Government showed a complete lack of understanding of how it would work in the draft workings presented to Council to date. Many of our Storm Water infrastructures are currently managed in the Parks and Reserves space, others are connected to the roading network, and many flow paths are designations across private property.

There is nothing about another level of bureaucracy that screams efficiency and better levels of service or better delivery. As one of the emails submitted by a high ranking local fire officer suggests, when FENZ was created under the auspices of greater efficiency we have actually ended up with 50% cost increases and, at best, no improvement of service over the old rural and urban fire brigade system.

However, the 3 Waters Reform is just one of the many examples of your rights being diminished by this Government. The honourable Boyack took great pleasure in informing Councillors in attendance at a recent Resource Management Act reform workshop about how NIMBYs would no longer halt progress on the grounds of loss of “amenity” values. The new Act has no provision at all for amenity. Amenity being things that you value about where you live, like peace and quiet, nice views, village feel and the like.

Again, good luck getting local views represented by the new system of appointed commissioners hearing all plan changes and subdivision consents etc.

Many other rights are being stripped from you as you read this. Some under the banner of COVID response, others just because we can, most from agenda’s that were never campaigned on much less consulted on.

Tasman District Council is also definitely experiencing a lot of positive change this term. Frequent bouts of COVID have sidelined councillors even more than before, and under these emergency regulations the Mayor and CEO assume control. The rest of us, especially those on the back benches, get to enjoy extended bouts of no contact and no input into Council business.

The tough part is the transition back into the business as usual phase when restrictions lapse. Letting go of the new power structure seems difficult for some.

When we were in the middle of signing off on the 2021 LTP I noticed that Council was advertising for a new deputy CEO. I found this interesting as I didn’t recall we had signed off on this position. I was informed that it had been presented to Council under the proposed new structure some months earlier. It can’t have been highlighted very well as I wasn’t the only Councillor that it came as a surprise to.

When I questioned how we could fill a position without the budget to pay them (it was apparently in the LTP) which I pointed out had not been signed off, I was told if they had to they would accommodate it within the existing management budget. At the time, I questioned how the budget could have that much fat in it, but was assured it would be accommodated.

Fast forward a few months and we get a report stating that the “Corporate overhead activity had a deficit of $152, 000” which includes Coporate, Finance, Operational Governance, Property, Office Overheads, Human Resources, Project Management Office, and Executive.

So in the handful of months since signing off on the LTP our governance budget has gone from having enough money to fund a deputy CEO from existing budgets, to being $152, 000 over the new budget. Given that I am sure the deputy CEO is on a remuneration that is likely well North of $200, 000,especially if you also take into account the staff that are needed to assist the new position, then we have managed to “lose” more than $350 000 in a few months.

We are told that the Project Management is largely to blame for the deficit and that much of it will be recouped by the time the Government’s spending up on projects with unspent COVID funds from the first round is completed. What they aren’t telling us is how much unattributed money the dam is costing us. We consistently have numerous staff working on dam related matters that is billed as “overheads” and are not tagged as dam related. This will only dramatically increase if 3 Waters negotiations are required.

Do not forget that we also have a need to house our ever increasing staff numbers. Despite the CEO telling me that the move of a number of staff to the office above the mall was a temporary measure and they would shrink back to the Council building once renovations were carried out it was only a few months later that we were told we needed even more staff space. After I insisted that we have a proper review of the situation it was decided nothing short of a complete rebuild or new building would suffice.

Even knowing this they refused to allocate any budget in the LTP and the auditor turned a blind eye to the glaring deficit in funding required in the next ten years ( I pointed it out to him twice).

But, it is ok. The Mayor, the deputy Mayor, and Councillor Wensley who make up the CEO review panel decided to take it upon themselves to give the CEO a well deserved pay increase. Once upon a time the review panel would make a recommendation for Full Council to decide on in relation to the CEO’s pay. Now they make a decision and it appears as a line item in the Mayor’s report with no further decision needed.

At a time when so many ratepayers are struggling with the effects of COIVD it doesn’t seem like a sensitive move to up the pay on the CEO. It also seems odd that a performance adjustment is made when the workload has dramatically decreased, given that the job description of the deputy CEO appears to assume a fair amount of the responsibility once assigned to the CEO.

With Mike Scott, CEO of the dam company, further reminding us that they at the “upper limits” of the previous cost blow out contingencies on a dam far from complete the pressure on rates is going to be extremely uncomfortable for many. Some in Council are hanging their hat on the 3 water reforms by the Government going to be the golden ticket to solve all our money problems. I hear from members of the community that some Councillors and staff think it is as good as a done deal and they have already spent the Government’s windfall. The deputy Mayor thinks that debt won’t be a problem because of the 2% interest rates that are going to continue for the next ten years.

I pity all those loading themselves up with huge debt in the current housing market to get into their first home. Especially those in this region. A more-of-the-same Council has no intention of keeping your rates down.

The Long and Short of it

17/07/2021

Tasman District Council has locked in the new Long Term Plan (LTP) for the next ten years (reviewed in 3 years). It locks you in to more debt and more rate increases, which is interesting given that I ran against a deputy mayor with twenty years experience who publicly stated he believed he would keep us within the $200million debt cap and 3% rate increases. At the time, I said I didn’t see how we could given that the dam was still blowing out (as it still is) and the costs associated with pending Government reviews such as the three waters.

That is not the only time that I challenged fiscal wherewithal of our current leadership. I challenged the continued un-budgeted spending that this Council was approving early in the term when COVID was rearing its ugly head around the world. I was told by the Mayor that this council was “well informed of the likely impact of COVID.” Two weeks later the country was in level 4 lock down and a couple of weeks after that we were passing a zero percent rate increase for the year. If our leadership were so well informed, why were they still proposing and passing million dollar un-budgeted projects?

I railed against the constant haphazard proposals to accommodate the increasing staff numbers. For instance we hired a floor above the mall for staff. At the time staff were telling me that this was a temporary measure. I said that we would never shrink back, but the CEO assured me that we would once the rolling renovations were carried out in the TDC building.

Fast forward a few months and we are being presented with another “once in a lifetime” opportunity to lease another level of office space. This on top of the proposal to expand the current Council chambers. Calling a halt to this constant haphazard expansion I said we needed a proper review of what was required. That was passed, as was a motion to halt spending on the Council chamber upgrade.

Fast-forward a mere two weeks and over the Christmas break staff carried out a renovation of the chambers, moving a tearoom and expanding the chamber footprint. I am yet to receive an explanation as to how staff have the authority to override a council resolution – other than it was accommodated within existing budgets.

The result of the accommodation review was that we need a completely new and updated building for staff. It was deemed to be an urgent requirement and we should get right on to it. So I tried to have funds allocated in the LTP that was just passed. Staff (and management) refused to allocate any funds in the consulted on LTP.

Why? Well because we did not have a quote.

Just like we don’t have a quote, or even a plan for the Million dollars of funding set aside for a regional boat launching facility.

Just like we don’t have a location or design for the Recreation Centre proposed for somewhere between Hope and Wakefield – but we do have funds allocated.

Just like a dam that we didn’t have a quote for but had (woefully inadequate) funds set aside in previous LTPs.

After we had consulted on the LTP and before we had even signed off on it, staff were back telling us about the urgency of the accommodation problem and how we need to start taking action because of “long lead times” and “Council reputation.” Even though the Government is about to remove much of Council’s responsibilities (and staff), and may even be about to amalgamate Councils with their big-is-better attitude.

One can only speculate that the real reason that we didn’t allocate funds for this imminently urgent project is that it would have pushed our LTP debt figure of the magic $300 million figure that is politically unpalatable (and might result in the appointment of a commissioner). Apparently, Mayor Kempthorne, had earlier proposed an LTP that reached similar heady spending heights, and was told it might be wiser to rein in spending. And a figure that starts to run into Government legislated debt cap ceiling issues.

Which draws me to the “Debt Cap” that we recently consulted on. Previously, we had a $200 million self
imposed debt cap. It was a figure well above the current debt levels of the day, and set to be a ceiling.
What we have now, is very different. Even though we use the same terminology of “debt cap.”

How is it different you might ask? Well, our current $280 million debt cap, knocked down to some $250 million by moving a bit of the debt into the Dam CCO (where we don’t have to include it in our figures), is not really a cap. Rather, it is a projected level of spend. Any future unbudgeted spend will automatically push this figure up. For example, unbudgeted spend like new staff accommodation.

A real debt cap, should not move because of the spending whims of a majority of councillors. Other unbudgeted spend that might occur – and has already occurred – is another Dam blow out. Already, we are up to the higher end of the most recent budget given by Waimea Water (the Dam company). The figures included in our consulted on LTP were at the middle to lower end of the forcasted budget. And let us not forget that we are only just over half way through the build, with COVID inflation likely to push up the cost of steel and imported materials – and without further “surprises” in the “bedrock”, that Mike Scott said was better than expected.

Speaking of inflation. Another example of how out-of-touch with global reality our management are: I tried to point out the cost to the ratepayers of the proposed level debt when interest rates go to 6% or 8 %. I was challenged by the deputy Mayor as to what they would be at 2% interest.

At $250 million (and doing some simple maths) its doesn’t take much of a shift in interest rates with such high debt, to affect rates. Amidst the round of chortling from the old-boy network for even thinking interest rates would go up, he retorted that he had information suggesting otherwise. I only hope its not the same advisor, who told him the Dam price was fixed?

In a world where global inflation is at levels not seen since the early 1980’s we apparently believe that interest rates will continue at 2% levels and not 1980’s levels. These are the same people “can’t be sure” that the dam will continue to overrun. Although, councilor Mailing would not take up my wager that the dam would not be built for the most recently forecast figure, which is surprising given how much higher that figure is than the $104 million that he publicly personally guaranteed he would ensure it would be built for (and on time) at the time of the last elections.

On the dam front: it is interesting to learn that the “shear zone” which is directly under the dam abutment is “not an earthquake faultline” according to Mr Kirby our head of engineering. I was asking Mike Scott if the shear zone is what a lay person might call an earthquake faultline. He said it was not, to which I suggested that begs the question of what the difference is. Mr Kirby gave a somewhat more detailed response defending the position that a shear zone is a small fracture caused by movement elsewhere (like one of the two faultlines either side of the dam). A shear zone is a small (in this case 5 meter wide by few hundred meters long) fracture, whereas a fault line stretches many miles.

Now whether we call it a fault line or not would appear to be semantics and headline damage control. What we have is a fracture caused by earth movement that sits right under the dam structure. If the ground moves again – along a fault line that is not this shear zone – what are the chances that this shear zone will respond by opening up more? Or perhaps there will be another shear zone near by that will open up – remember there is going to be an extraordinary amount of extra pressure here once the reservoir is filled. But of course I am no geologist. And maybe the concrete band aid we are applying will stop any future ground movement and the water will not flow out new cracks, nor will the dam crumble around a failing abutment during an earthquake.

I guess we should be reassured that the recently disgraced ex-MP Nick Smith cast his engineering trained eye over the site and said he could see no issues. He also guaranteed a bottle of win to those downstream of the dam in the event of a dam failure. Which I am sure is of great comfort to those down the valley.

It is also comforting to know that we are having an inquiry into the dam process that saw us go from a “P95” (95% certain to come in on or under budget) $75.9 million dam to a “good as fixed price” $104 million dam to a who-knows-where-we-will-end-up $million dam. As mentioned before, it already has gone up another $5 million (equating to $163 million) within a week of the LTP being signed off.

What is odd about the inquiry is that it only came about after much public noise. It was previously unsupported by council as a measure of good governance practice. How times can change. A few weeks can be a long time for some memories. According to the CEO it is now a way of clearing staff names that have been called in to question. It will be interesting to see if it meets the brief.

I voted against it. Which may seem to odd to those who heard me calling for it in the first place.

The scope of the inquiry is purely retrospective. There is no provision to investigate the current management and governance of the dam which is the only place that savings can potentially be found for the ratepayer. A retrospective inquiry can be held at any time, there is no urgency, and little to be gained on this project. Yes, it would be good to expose the decision making that got us in this position but what real-world governance would allow a project to overrun three times the P95 price only half way through the job without questioning the delivery?

Unfortunately, the Office of the Auditor General (OAG) was not interested in undertaking this inquiry either – according to staff advice on the day we voted. At least that is what we were told, until councillor Greening asked for confirmation of this position. Within a few days, staff were advising that the OAG might now be interested, and that staff would be seeking clarification. A few weeks later, and the OAG advised us that because council had undertaken their own review, an OAG review was not necessary. Apparently it pays to take the drivers seat, if you want to avoid a truly independent review?

On the bright side, John Palmer’s (ex-CEO of the bankrupted Solid Energy and man assuring us that the dam was going to be built to the P95) brother is involved in a review of Local Government. As quoted in a RNZ interview:

Review panel chair Jim Palmer said it was a once-in-a-lifetime chance to make a difference, but warned the decisions made were “not going to please everybody all of the time”.

We look forward to another 12 months of a more-of-the-same only more expensive Council.

QUESTIONS to be answered – in my mind at least

27/03/2021

How does a P95 $75.9 million dollar dam blow out to $300 million?

Yes, you heard that right. The Waimea Irrigation Dam is on track to push closer to $300 million than the currently revealed $180 million. Despite the fact that they have been trying to hide increases by dropping aspects of the dam that were part of the original quote and now calling them an extra, there will be no hiding from surprises yet to be revealed according to whispers on the street. So far the most reliable source of information on the dam that I have found. A scenario that you might want to turn your mind to when submitting on the Dam funding proposal in the Long Term Plan.

Consider the staff reports that told us that this was an almost risk-free p95 $75.9 million dollar project. Whenever I asked questions about rising costs in the contractor space, the cost of clearing the reservoir, putting in the roads, stabilising the banks, and the risk of a Clyde Dam leak fiasco I was told about “expert opinion,” “peer review,” “P95” and all the contingencies built-in. The Waimea Water website boasted that this was the “best researched project in the history of TDC.”

There was a slight hiccup when we went out for tender, but nothing that $104 million couldn’t solve. And now we had a “good as fixed price dam” I was told when I ask what certainty there was around this price given that the P95 wasn’t worth the paper it was written on. Only $9 million of the $104 million dollar project wasn’t a fixed price.

When the board of Waimea Water was appointed they investigated the project and came back with a glowing report about how fantastic a job had been done and how they were very confident of delivering the project on time and on budget (despite the extra fees they claimed for their work).

Mike Scott arrives and is full of bravado about how he was the man to deliver the project on time and on budget, and how lucky the region was that the naysayers and short-sighted progress stoppers had not won the day. When quizzed about the lack of bedrock he proudly pointed out all the visible bedrock and said there were no problems.

At the first sign of problems, Mr Scott starts to blame the lack of comprehensive research and how there were a lot unknown unknowns to be contended with. Tasman District Council chief of Engineering produces a report telling Councillors that the Tonkin and Taylor work highlighted all these risks. Interesting that none of these risks were raised in Council Chamber previously when we had a p95 or “good as fixed price” dam.

More problems and more money is required. Once again the staff reports revert to talking about the unknown unknowns and geological risks. Now nobody is to blame because we took the best advice from all our experts. Perhaps our peer review should have been done other than our peers?

Certainly, the community raised all the unknown unknown issues of there being no bedrock on the left-hand embankment, of the P95 not being a P95, and of the costing being $100 million short. Actual dam building experts who offered to cast their eye over the project were politely declined in favour of peer reviews.

All the while Councillors were kept at arm’s length. Councillors were removed from the contract negotiation table. Councillors were forbidden to read Terms Sheets until the eleventh hour. Councillors were shut down when asking questions of staff and experts – a maximum of three questions on thousands of pages of agenda, and we don’t have time to get into that kind of detail. Councillors were also expressly forbidden for standing on the Waimea Water board as spots were reserved for irrigators.

Our “no surprises” policy with Waimea Water Ltd appears to be a case of they don’t tell us anything surprising until they can hide it no longer, rather than a case of there is a hint of an issue so they pre-warn us. Perhaps that is why no Councillors were allowed on the board?

Of course, my information could be wrong and we might not be about to be informed of another blowout that will make the other blowouts look like prematch warmup games? Time will no doubt tell – probably timed to tell just after the Long Term Plan consultation closes?

Not to worry. As the deputy mayor says, in 20 years no body will remember how much the dam blew out by, and all those who voted it through will be remembered as heroes.

Or as the Mayor is currently telling us, not to worry the Government is about to step and take the dam debt off us, along with all our water infrastructure. Of course, councils in good shape will receive a payment for their water infrastructure to spend on other things. It will be interesting to see if we don’t end up with a bill after they take our infrastructure (especially if the dam continues to head toward $300 million).

What the Mayor doesn’t explain quite as well is that this spreading of the cost to a greater rating base after the Three Water reform is unlikely to reduce the burden of debt on the water user at all. One option is that we are grouped in with Wellington and the billions of dollars that they are required to spend to bring their services up to date. Or we could be grouped with Christchurch and the West Coast that will have the same unrealistic costs to meet drinking water standards. The truth of the matter is that reticulated water is about to become less affordable here than in Saudi Arabia.

One wonders how many others sitting around the Council chambers have directorships lined up with local earthmoving contractors and orchardists when they depart the scene? I suspect if you follow the money trail it will be a case of “no surprises” there. The incompetence excuse only holds water for so long. A P95 $75.9 million dam does not turn into a $300 million dollar dam because of COVID and unforeseen unknown unknowns. A P95 is statistically robust to accommodate 95% of the unknowns.

Will politicians that were threatening Councillors who voted against the dam be called to account?
What happened to the “hard questions” they were going to ask after the dam blew out from $104 million to $139 million?

How did independent water authorities headed up by ex parliamentary commissioners fund media campaigns against Councillors not voting for the dam? Were they appointed just because they lived across the fence from the Council CEO of the day? Can they maintain their “independence” when they were standing outside of the Council on the day of the final vote handing out vote-for-the-dam buttons and propaganda?

Yes, I think it is time there was an inquiry into how a P95 $75.9 million dollar dam has got to $182 million and is allegedly about to go significantly higher.

Given the fact that we appear to have learned nothing from the Mangawhai Sewage debacle and the lack of early intervention from the Office of the Auditor General to the many pleas from the community, I do not doubt that the Government will be quite prepared to cover their tracks with retrospective legislation again – if any hint of impropriety is uncovered should any investigation occur (for some reason there Councillors around the table voting against a report on what an investigation might look like – nevermind actually holding an investigation).

More Lies More Debt

26/02/2021

You elected more of the same, and they delivered for you.

I ran for mayor against a deputy mayor with 20 years of experience that told the residents of Tasman that he believed he could keep within our debt cap and rates cap by making the hard decisions. At the time, I said I would like to think we could but I don’t see how it will be possible with a dam that is continuing to over-run and Government reform (such as the freshwater and three water reform) increasing our costs. Other elected members also claimed to want to stay within our fiscal caps.

The first 12 months of Council saw us spending millions of dollars of unbudgeted money, which alone sent us over our already maxed out debt cap of $200 million. Not a single debt control “hard decision” in sight.

Then along came the first of the dam overruns, taking our dam from ~~$76 million, $79 million, $83 million~~, $104 million to $139 million.

How did we propose to keep all this under our debt cap?

Easy. We just inflation-adjusted out the debt cap and backdated the adjustment to the time of installation, and like magic, we were now under the debt cap again.

Awkwardly, the dam has overrun again just before we published our 10 year plan. Now we have to rewrite our 10 year plan to get it passed the auditors approval because the figures were horribly out-of-date.

What does our “debt cap” look like now?

First of all, let us stop using the lie that it is a debt cap. It is a projected level of debt figure. It is not a cap under the current Council. We will continue to adjust it upward to accommodate spending. There is absolutely no appetite around the table to cap spending at all.

Currently our projected debt that we are consulting on is $280 million. Again, this is ~~a complete fabrication~~ only half the story designed to get the current mayor elected for at least one more term.

Already, we are deliberately not including figures to house our rapidly increasing staff numbers (unless Government reform robs us of our duties and our staff – in which case they will have to be housed somewhere but it is not the Council’s problem?). We know that to solve the projected numbers of staff within the next 10 years we will have to spend a figure that will push us over $300 million in debt.

How do we intend to hide debt going forward?

I am pleased you asked.

We are concurrent with the Long Term Plan consulting on a proposal to create a holding company to amalgamate the Port and Airport under. Sounds pretty harmless?

The purpose of creating this new CCO is that we sell our shares in Port Nelson and the Nelson Airport to the bank. Much sneakier than the less politically palatable prospect of selling the shares directly. Once we have established the CCO we can move debt into the company and then for accounting purposes we don’t have to record it as debt on Council’s books.

Instantly, we can pay out special dividends to the Councils and load the new CCO with debt magically reducing our debt levels. I say magically because we haven’t reduced our debt, but we have reduced future dividends from the Port. Effectively, we have sold our shares to the bank.

I am sure the Council spin doctors will tell you a different story.

I tried to ask for some accountability within Council…

… around the ~~lies~~ ~~missinfomation~~ information that was presented to both Councillors and rate-payers around the Waimea Irrigation Dam having a “P95” at $75 million. This is a technical statistical term that has requirements to meet before you can use it. I asked to see the workings that enabled Council to use the term. My request was denied.

I also asked for accountability around the statement made to Councillors on the day the dam was signed off, in response to a question that I asked of what assurance do we have the dam will be built for $104 million given that we had a “P95” at $76 million. We were told that we are even more sure, “it is almost a fixed price contract” now. There was only a tiny portion that wasn’t fixed price and we had the “equivalent of 30% contingency” on the small amount that wasn’t fixed price.

Obviously, this was a case of my word verses others word as to what was said and the mayor wasn’t prepared to debate that, so again, there will be no accountability for fabrications told. I previously asked Mike Scott for an estimate of how much of the contract was actually fixed price. I have not been provided with that information.

Have we seen the last of the dam over-runs?

Based on the previous performance of Waimea Water and the irrigator run predecessor to Waimea Water, it is highly unlikely that the dam will be delivered for $164 million.

Meanwhile, back in the Council Chambers:

In the recent Council meeting, the Deputy Mayor moved a motion to reverse the decision that I had previously managed to get passed where the irrigators would be target rated for “their share” of all future cost overruns. The proposal now being consulted on has the ratepayer picking up even more of the irrigator share of the dam. Surprising that the people of Murchison and Tapawera are so supportive of this approach. But then I guess I shouldn’t be surprised because this is apparently also the view of Golden Bay and the majority of Motueka, Richmond, and part of the Moutere.

To illustrate the gross subsidization of the handful of irrigators that the Waimea Irrigation Dam was built for, the proposal that I had moved for consultation would see the rates being paid by irrigators on the Waimea Plains are almost identical to the water users downstream of the Kainui Dam.

Let’s put that in perspective. The Kainui Dam built some 15 years ago at a final cost of around $3 million dollars is costing the water users a similar amount to the projected cost of the Waimea Irrigation Dam (at the $139 million figure) if we target rate the users for “their share” of the costs. So not only would the Waimea water users not been paying any more than the users of a $3 million project, they wouldn’t even be paying for 15 years worth of inflation.

Your duly elected members think it unfair that the Waimea irrigators should even be paying more than the Kainui Dam water users. Therefore, they have proposed that we consult on a financial model whereby general rate-payers pick up all the overrun costs (both the current estimated extra $30 million blow-out and any future blow-out). Once the precedent is locked in, it will be in perpetuity.

In addition, I am informed by members of the community that the running costs of the dam that were well below a million dollars when we had a P95 $76 million dollar dam, and are now predicted to be $3 million a year, will likely be double that again by the time the dam is commissioned.

This information is of course coming from the same “naysayers” and “fear mongers” that said the geology of the dam site would mean costs would be far in excess of the P95 price that Council was touting. And despite Mike Scott’s assurances that they were on bedrock and there was bedrock plainly visible up the valley, it turns out to be more of a “moonscape” and has caused the budget to blowout again. Who is more reliable?

To summarise: we are consulting on a debt cap, that is not a debt cap but a debt target, of $280 million. It is a fabrication that does not reflect costs that we already know will push it over $300 million. We plan to hide more of that debt by selling our shares in the Port and Airport to the bank under a proposed new company structure. General rate-payers should subsidize the Waimea irrigators further because they can’t afford their almost free water. You haven’t seen the last of cost increases for the Waimea Irrigation Dam.

This is the choice you endorsed at the polls, and they have delivered for you.

Council Health Check

17/12/2020

I must preface this post with an update of my situation after more than one Code of Conduct complaint brought against me for the content of my blog. The problem, I am told, is that I connect the dots for you. Apparently, I have to just point out the facts and let you connect the dots. I am not allowed to fill in the blanks and tell you what I think of the Mayor, other Councillors, or staff. So, with that in mind here is a little recap of what I have to deal with – what do you think?

Last year Councillors were presented with a report that said we had to rent a floor of office space in the Mall because we needed to refurbish the Council building, and we could only do this properly by moving a large group of staff out of the building and conducting a rolling refurbishment throughout our building.

At the time, I said let’s be honest that once we expand into the mall we will never shrink back. The CEO assured me that that was not the case, that we would indeed give up the mall lease and return to our original footprint once the refurbishment was done.

A few months after our expansion into the mall premises Councillors were presented with another once in a lifetime opportunity to expand into a nearby building because staff were unable to function in the workspaces of our current location. Despite the fact that when requests for more and more staff were coming through, I started asking what the cost of taking on these staff would be. At the time I was informed of the wage cost. I responded with the wage cost is only part of the cost, what about the cost of accommodation? I was assured that we would “squeeze them in.”

In between moving staff to the mall and telling us we need to lease another building; we were presented a case of how we needed to spend hundreds of thousands of dollars upgrading the civic area of the council buildings.

Fortunately, Councillors were able to create enough pushback to halt these endeavours by staff until a proper review of our building requirements was carried out. Had we not done so; more money would have been wasted on half-baked solutions.

The Motueka Library was another example where decisions were made on information that was suspect at best. When the proposed new Library for Motueka was put forward there was a drive from a number of Councillors and community members to create a “hub” where the library would incorporate a new Council centre as well.

Staff pushed back saying that the service centre was fine and we should only build a single-story library.

No sooner than Council had signed off on the Library design than a staff report came through telling us that the Motueka service centre was “not fit for purpose” and we needed to rebuild it.

This was also prior to the staff accommodation review telling us that we needed more staff office space. Taking all this information into account would have made a very different picture for the economics of building a multi-story library in Motueka with the ability to house more staff and serve the community well into the future. Instead, we have a barely big enough library that does not solve any of the other issues.

Earlier this year, I was concerned with the constant proposals by staff that we spend literally hundreds of thousands of dollars, seemingly at every Council meeting, and the Councillors that were voting according to staff recommendations.

I suggested that our Council had no idea of the impending impact that COVID was about to have on our community and their ability to fund all this unbudgeted money that we were spending (after all the previous Council spent every last cent of our debt cap and future commercial returns to fund a dam).

Because of my involvement with the Stock Market, I was watching the global situation with COVID and the impact that it was having around the world as it headed our way. But after my comment that this Council was ill-informed, the Mayor assured me that he and the Council staff had a “pretty good grasp” about COVID and its potential impacts.

About two weeks later the country was in level 4 lockdown, and a few weeks after that the Council voted through a rate freeze for the current year. Well informed?

All of this continues to build on a dam that we were told had a 95% probability that it would be built for $76 million. Or the “as good as a fixed price” $104 million dam. Currently, the dam sits at $139 million plus COVID related costs, plus other design work that was not part of the original quote. A further costing update we are promised will be tabled in February next year.

Tomorrow we will be asked to vote on a new Long-Term Plan and there will much justification about why we need to raise the debt cap and rate increase cap. Councillors who said during campaigning that they were against raising debt caps will be arguing for it. They were also signing off on all the unbudgeted spending that has put us in this situation.

The Mayor who campaigned that he believed he could keep us within our rate and debt caps (with his 20 years experience) by making the hard decisions, also did not make a single “hard decision” this year that would have led to us reducing our spend in any way.

In fact, he was one of the most vocal proponents for Council giving the Nelson Regional Development Agency an extra $200 000 (he was in favour of more) for a total of $500 000 of rate-payer’s hard-earned money this year alone. What return have they achieved with this money? So far, all I have seen is a report about why they need even more money.

To the people of Tasman who elected a “more of the same” Council, we have delivered for you more of the same. More debt, more poorly directed spending, and in my view a complete lack of accountability for the poor decisions that put us in the situation where we are challenging the leader board for the most unaffordable rates in the Country.

That said, I wish you all a Merry Christmas, and I look forward to hearing from you as we go out to consultation next year with our proposed Long-Term Plan of unaffordable rates and skyrocketing debt.

3 Waters Reform and More

The Long and Short of it

QUESTIONS to be answered – in my mind at least

More Lies More Debt

Council Health Check

Fantastic Speech

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