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QUESTIONS to be answered – in my mind at least

27/03/2021

Crime scene clean up

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).

Filed Under: Dam, Your Say Tagged With: cost blowout, Dam inquiry, Waimea dam

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.

Filed Under: Dam, Spending, Your Say Tagged With: rate affordability, Rate increase, Tasman District Council, Waimea dam

Council Health Check

17/12/2020

sanctioned

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. 

Filed Under: Dam, Spending, Your Say Tagged With: bad decisions, Council debt, more of the same

Spend Spend Spend

29/05/2020

Money shake down

The impact of the Government’s response to COVID-19 is beginning to be felt around the country with much more still to come as the wage subsidy is yet to run out and still no sign of a business as usual call from the Government.

In the current Long Term Plan pre-consultation Council survey 75% of respondents have said that they expected the Council to operate within the fiscal limits of debt cap and rate increases. We have a Mayor who campaigned that he believed he could keep us within these limits. Other Councillors also indicated that they would keep debt cap.

Decisions made by this Council consistently went the way of spending large amounts of unbudgeted money indicating that we had no intention of living within our means. Both staff and Councillors are now suggesting that we need to lift our debt cap.  

In the CEO’s report for the 28/05/20 Council meeting she quotes New Zealand economist Shamubeel Eaqab who seem to be the hero of the current agenda by central Government and Local Government NZ.

“We need to ask how we can come out of this as strongly as possible. Be as bold and aggressive as possible because this is truly the greatest challenge that we faced since the great depression. Invest in the social and physical infrastructure of New Zealand. That will look after our children and grandchildren, that’s the opportunity we have now.”

Of course, the Government can print money do this. Our previous council way over committed itself and future councils for the next ten years (at least) to build the Kempthorne memorial of woe. We have no headroom to be saving the New Zealand economy.

Shamubeel is also the author of the metric as provided by the NRDA (Nelson Regional Development Agency) in a joint Council workshop lead by Mark Rawson.

Every $1million of rates relief provided supports approximately 8.5 jobs in the economy (i.e. the savings created 8.5 jobs through more productive investment of that $1 million)

However every $1million of interest payments for council investments in a capital works supports 155 jobs in the economy (approximately 18x multiplier).

If the idiocy of this comparison is not immediately obvious to you (like apparently those presenting it to us) then let’s compare apples with apples.

Every $1million of interest comes with $20 – $25 million debt which would typically be spread over 30 years worth of repayments. The total cost the $1 million interest payment and 155 jobs would be in the region of $50-$60 million if my math is correct. Even if my math is not correct, it is fairly obvious that if we comparing the total cost of the $1 million in interest with a comparable amount spent on rate rebates – I think the “18x multiplier” is a sorry joke. If we take the 8.5 jobs per million of rate rebate times $50 million of loan costs then we get 425 jobs created. Compare those apples!

However, we shouldn’t let facts get in the way of the current propaganda being foisted on the Councillors to encourage their already eager ambition to spend a fortune of ratepayers money on all the planet saving wet dreams that they can come up with. Meanwhile dam costs continue to spiral ever upward.

What The Friday

Another example of how your Council consults with you because your opinion counts is the issue of Chlorination of your drinking water supply (for those of you lucky enough to be on a supply without permanent Chlorination). We are, or are soon to be, asking if you would like your health “protected” through a permanently chlorinated water supply.

However, just in case you give the wrong answer, on the 21st of May 2020 Council passed a Drinking Water Quality Management Policy. During the time of debate, I asked if by passing this Policy I was also passing compulsory Chlorination. There was some side-stepping of the issue in the staff response. So, I asked again if it was possible to meet these standards without permanent Chlorination. The response was that it maybe possible but that it would be extremely difficult and expensive.

The end result of passing that Policy is that any future consultation will be a moot point as we will consider public feedback along with staff reports and Government recommendations and come to the informed decision that we have no choice and will implement Chlorination whatever the majority result of the public consultation desires.

The fact that we have nullified public feedback before seeking it is one aspect of this process that annoys me. Another aspect is that the staff tell us that the Government is moving to require all public supplies are Chlorinated therefore, why are we wasting staff time and your money going through the motions of consultation etc by trying to pre-empt what is apparently soon to be legislated?

In conclusion, I will be very surprised if the projected debt during this round of the Long Term Plan (LTP) setting does not once again hit $300 million.

Last time there was a projected debt of $300 million the fine folk of Tasman reacted so passionately that the current debt cap of $200 million was self-imposed.

The difference between then and now is that they tell me they had no intention of spending $300 million last time but that the LTP was a wish list of all the projects that everyone thought might be nice to have and had not been refined down to actually achievable.

This time we will be spending all that money as we try and help the Government jump-start the economy, respond to the requirements of rapidly rushed through Government legislation, house the exploding staff numbers, upgrade everything else associated with more staff and rapidly advancing technological requirements, deliver on the save-the-world ideals of some Councillors, and of course continue to pick up all the liability for the runaway dam overruns.

Filed Under: Spending, Your Say Tagged With: Consultation, Debt, Tasman District Council

Spin Doctoring

11/05/2020

No logic exists in this

Dr Spin goes to work in the Council Newsline again this week (8 May 2020). See if you can spot the trend.

On the Motueka Library project:

Mayor King looks at the cost of cancelling the project as part of the decision making.

On the topic of permanently chlorinating all water supplies:

Mayor King says feedback will help us make a well informed decision

Obviously, we are a council that likes to assess all information and not a Council bent on making an ill-informed decision.

Crazy Pills GIF from Crazy GIFs

Is this the same Council that I was in when we tried to get all the information to make an informed decision around whether to continue with the Waimea Irrigation Dam?

Oh the difference that a week makes. Or is it just a change of agenda?  When we want to do something, we need “all the information,” when we don’t want to do something it is just a waste of money getting all the information because we already know all about it (or are we afraid of what might be revealed?).

Perhaps we have Third Term arrogance already too?

When the Government announced the waste of tens of millions of dollars buying back guns when they outlawed many semi-automatic weapons I questioned if they were going to ban 3D printers too. At that time, I was attacked by pro-Ardern Facebook trolls for a ridiculous statement. Of course, these warriors of the internet have no idea (like our Government it seems) that it has never been easier to download plans to 3D print all the parts that you need to convert rifles into assault rifles.

Recently, the Government announced that we were making people self-isolate when they entered NZ because of the COVID19 risk. At that time, I made the comparison to the Government’s over reaction to one lunatic with a gun and how they were now letting killers loose on the streets of NZ (unless they wanted to self-isolate). Once again, my comparison was questioned by the hero’s of the internet. A week or so later we are in level 4 lockdown to “save lives.”

The inability of people to follow a logical discussion, or to apply reason consistently, is the greatest frustration I have faced since delving into the murky world of politics.  

The second greatest frustration would be the high level of secret squirrel activity.

Take the current COVID19 situation. As a councillor, I was forwarded an update from the Covid-19 Local Government Response Unit which I presume was a regular update that I only received one of. I received it in “IN-CONFIDENCE” and was thus unable to discuss the information which contained the figures of infection by district.

There was no need for this to be withheld from the public by the Government or local Government. It may have assisted with compliance to the lockdown at least in the more heavily affected areas.

During the Pigeon Valley fire I also found that there was a lot of over-the-top secrecy protecting information that I felt should have been publicly available -that a full evacuation of Wakefield was imminent for instance. Businesses supplying food might have had interest if no-one else.

The lack of honest communication leads to social media running wild with rumours and speculation.

Or once again, are we in a situation where information is being hidden for a reason?  For instance, Councillors were never permitted to see how the Pigeon Valley Fire Mayoral Fund was distributed. Given that the Mayor and Deputy Mayor of the day were beneficiaries, and that they were overseeing the fund, you would have thought it prudent that there was open scrutiny over the distribution of these public funds?

As I finish this it has been announced that we are moving to COVID alert level 2 … but… we have all kinds of inconsistencies in how we will apply our gatherings.  You can space out at rugby matches but are not allowed to space out at church for instance. Restaurants can only take group bookings of no more than 10 but no limit on how many groups or individuals they accommodate? Schools are open so I suppose there will only be 10 to a class? Or 10 to a bus?

Good luck “team of 5 million” you are in excellent hands. 

Filed Under: Spending, Your Say

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Councillor McNamara: As Reported In The News

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