Councils lose money now if late

February 19th, 2010 at 11:00 am by David Farrar

Colin Espiner writes:

Regional councils charging late fees for rates payments are about to get some of their own medicine.

Environment Minister has outlined details of “financial incentives” for councils who fail to process resource consent applications within the statutory 20 days.

Under the changes, which the Government wants in place by July, councils that are up to a week late in processing a resource consent must provide a discount of 25 per cent of their fee. A further 5 per cent discount will be added for every week the consent is delayed, up to a maximum of 80 per cent.

An excellent initiative. Councils, like most organisations, respond to incentives. The threat of reduced income should lead to greater efforts to process consents within the legal time period.

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34 Responses to “Councils lose money now if late”

  1. Don the Kiwi (1,577 comments) says:

    About bloody time.

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  2. maurieo (95 comments) says:

    It will also result in Councils issuing even more requests for further information (RFI) and stacking the RFI so that they can send them out 1 at a time so that they can stop the clock if they are not on track with their processing. They have been practicising these procedures already in anticipation. The “cotton wool effect” a push in one spot causes it to push out somewhere else.

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  3. Graeme Edgeler (3,262 comments) says:

    And the cost of all resource consents goes up to cover the discounts…

    [DPF: You assume the incentive will not work. I think Councillors will not be keen to put up overall fees on the basis they keep missing their legal deadlines. If I was a Councillor I would refuse to vote for that, as voters would chuck me out]

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  4. toad (3,668 comments) says:

    So you and I end up footing the cost of Councils’ tardiness in processing resource consents through our rates bills!

    I’d rather see the individuals employees responsible (and if the tardiness is systemic, this would likely be some senior executives) face disciplinary action.

    Edit: Or what Graeme suggests happens.

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  5. lofty (1,303 comments) says:

    What the!!…… toad calling for personal responsibility, well I never.

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  6. MikeNZ (3,234 comments) says:

    I agree toad maybe if some got sacked things would come right.

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  7. NOt1tocommentoften (436 comments) says:

    Good if the delay is due to laziness or is an intentional attempt to stall a process. But if it’s due to resourcing issues and other external factors then it is ultimately the rate payers that foot this bill. Cheers Nick.

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  8. lofty (1,303 comments) says:

    Yes Mike, I also can only agree with the toad, which for me is a personal 1st.

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  9. Darren (12 comments) says:

    Excellent, so now ratepayers get to subsidise property developers. Awesome.

    This will result in the councils sending out more sec 92 requests (not enough info requests, puts the consent process on hold) as a way to slow things down, which they do to a certain extent already. Or are there to be limits on how many sec 92 requests can be sent? Which BTW, will result in substandard developments, sort of like leaky homes.

    What choice will the councils have, but to increase rates to make up for the shortfall in funding.

    Is this how it will work?

    1. not enough staff to process consents in a timely manner.
    2. lets pay the council less than it cost to process if they dont do it in time
    3. even less money to employ staff to process consents
    4. pay council even less money because there are even less staff
    5. …..you can figure out the rest eh?

    “An excellent initiative.” LMAO, you must be taking the piss

    The only thing the threat of reduced income is going to do is force the council to get the money from elsewhere. Now where is the most likely place for that going to be? The ratepayer.

    [DPF: You have never worked in the private sector I presume? If finishing a job late means you lose income, you make sure you apply sufficient resources to finish on time.

    Here it is even worse. Councils have a legal obligation to perform on time. If income is reduced to the Council, then Councillors will demand an improvement in processing consents. This may not mean more staff, but if it does then that is a good investment as that means they get more income.]

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  10. burt (7,789 comments) says:

    toad

    No no no, these individual employees should all be protected by the union.

    They are all equal and any differences in the turnaround times are a result of work loads and individual consent complexity. Really there should be an average turnaround time rather than an individual consent turnaround time and measurement of staff performance must be generalised rather than actually identify failing employees. Employees are more important than the people wanting their silly little consents approved and to punish individuals who are hopeless at their job is just not fair…… Hell, people like you will be calling for performance pay next and the results of your desire to identify poorly performing employees will just end in rubber stamp approval as employees work solely to meet targets.

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  11. gazzmaniac (2,317 comments) says:

    Why only limit it to resource consents? It should be extended to building consents also.

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  12. burt (7,789 comments) says:

    gazzmaniac

    Good lord – you too…. Keep up, the job of approving consents is about the approvers and the consents are just a minor part of the equation. The approvers are the most important thing and their jobs are more important than the outcome of a consent being approved or not.

    Hell – there will be an approvers strike next and you won’t even notice the difference in turnaround times. doooh.

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  13. lastmanstanding (1,200 comments) says:

    I wanted to extend a wooden deck from 2 metres wide to 4 metres wide on my house.

    The cost was as follows.

    Labour $5500

    Materials $8500

    Council fees and other fees required to be spent by them $10,000

    Yes thats right TEN THOUSAND DOLLARS!!!!!

    And thats whats wrong with local government in this country. A bloated monopoly extorting money from ratepayers.

    IMHO the max fees should have been mo more than 10% of the other costs.

    Alas we have allowed this mafia organisation to get totally out of control.

    They need reigning in big time

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  14. MikeNZ (3,234 comments) says:

    Burt
    Or you could own a football team ;-)

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  15. gazzmaniac (2,317 comments) says:

    I found out recently that councils can (and do) contract out their building consent process – one example is Grey District Council, and I know the Kapiti Coast DC do contracting for other councils. It is a good idea – there are little to no issues getting building consents through either council (although KCDC introduces new rules periodically and don’t tell anyone…). Presumably contracts would be updated to allow for the costs to be transferred to the contractor.
    Just a thought – it could be applied to resource consents also.

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  16. MikeNZ (3,234 comments) says:

    Lastman
    That’s Rodney’s Job isn’t it?

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  17. gazzmaniac (2,317 comments) says:

    lastmanstanding – you should have just built it and waited for them to say something. If you built it yourself you could build it and rip it down twice before you are behind with the council fees!

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  18. lofty (1,303 comments) says:

    come back toad, and give us the benefit of your conversion to the right.

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  19. kaya (1,360 comments) says:

    gazzmaniac – agreed, just build it. It’s a small deck extension, not a block of apartments!

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  20. Darren (12 comments) says:

    ‘[DPF: You have never worked in the private sector I presume? If finishing a job late means you lose income, you make sure you apply sufficient resources to finish on time.'

    How nice of you to presume. You presume wrong. I work in the private land development sector. So where are the sufficient resources going to come from DPF? Was I wrong in saying they will come from ratepayers?

    'Here it is even worse. Councils have a legal obligation to perform on time.'

    Yes they have an obligation to perform on time, but as I said above, there are ways around that. Sec92 requests.

    'If income is reduced to the Council, then Councillors will demand an improvement in processing consents.'

    OK so just because the councillors demand an improvement in processing consents, it will just happen? Do you think they (planners) sit around doing nothing all day? Are they just not productive (whatever that means) enough?

    'This may not mean more staff....'

    So how else will more consents be processed on time? Shortcuts perhaps? Less regulations maybe? Leaky homes mean anything to you?

    '.....but if it does then that is a good investment as that means they get more income.]‘

    No, its SPENDING more (public) money on staff to avoid a REDUCTION in income (from private sector developers). The nett result being the same, LESS MONEY for council, which will have to come from somewhere else wont it?

    Or have I missed something here?

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  21. toad (3,668 comments) says:

    lofty, burt

    When have you ever seen me defending incompetent employees here? I encourage employees (apart from senior executives) to be union members, and I agree that they should be treated in a substantively and procedurally fair manner by their employers, and that their union should defend them if they are not.

    But I do not agree that incompetent staff who are treated fairly and given the necessary training and opportunity to improve their performance should be defended by a union if they are disciplined. I have worked as a union official, and there have been times where I’ve said “Sorry, mate, but I think you brought this on yourself and I don’t really think you have a leg to stand on legally”.

    I have also dealt extensively with Government agencies, particularly ACC and Work and Income, and consider that incompetence is rife there. But that is usually not the fault of individual low-level employees – it is a systemic failure for which senior managers should be the ones accountable. While I haven’t had extensive dealings with local government, I suspect that may also be the case there.

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  22. maurieo (95 comments) says:

    Perhaps Council’s will have to come to grips with the reality of the real business world and adjust to suit. There is a lot of fat in their systems that they could absorb
    Councils require you to pay the fee up front and get the interest on that while they hold up your application – they dont trust their clients to pay and have no faith that their product is value for money
    Council chargeout rates are loaded with excessive overhead – the person at the front desk that receives the application is charged out at over $60 per hour
    If Councils do not have the resources to process the application they find the most expensive consultant they can and give them an open cheque book to process the application creating a wide range in the cost of processing similar applications.
    I understand that Hamilton City Council has a set fee for their basic applications and already has a policy in place where they refund the fee if they don’t meet the target. They appear to have good systems in place and could perhaps be a model for others.
    Why is that every Council has a different processing system – a lack of National Standards perhaps.

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  23. lofty (1,303 comments) says:

    toad, thanks for the reply, a bit off subject I know, but I have also worked as a union official, and I know conversely to you that many many underperforming workers ARE protected by the machine.
    I still see it every day.
    I never thought for a second that your conversion to light side was for real. :-)
    I totally agree with you that incompetence is rife in most Govt agencies, and it probably is symptomatic of systems, but for Gods sake when even the most basic of customer relations duties are ignored and fundemantal politeness is replaced by overt rudeness or just plain indifference, it cannot all be the fault of supervisory staff.
    Some things are just plain manners, which have become sadly lacking across the whole spectrum of our society.
    This is symptomatic of a societal breakdown in standards, (in my humble opinion) something the left have to take great blame for.

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  24. burt (7,789 comments) says:

    There is actually one other change that could be made to the consent approval process. That being that all objections that the council have are reported in the first rejection rather than one at a time requiring a new fee to be paid and another 20 day period to start. Sure there are some objections by council that are not apparent untill the request is re-submitted, but consents should not be allowed to be rejected for reasons that could have reasonably been noted in a previous objection.

    One example I had went through 4 rounds and in all cases the objections were all to things that were in the original request. incompetent is not a strong enough word to describe the self serving muppets who think their job is to stop everything because they can.

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  25. NoCash (255 comments) says:

    Good idea indeed!

    I was once late with my rates payment by one day and was done with a 10% penalty.

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  26. Lucia Maria (2,202 comments) says:

    Oh my goodness, I agree with Toad as well!

    I’ve owned a business, so I know where money comes from.

    However, in the case of councils, they run monopolies. If they stuff up, they generally up the rates to cover the shortfall. We as ratepayers have no other option except to pay the rates, otherwise the council can take the money out of our mortgage or force the sale of our houses to cover any unpaid rates.

    What other private business has that sort of power and captive market?

    Surely it would be better to look at the whole resource consent process and streamline it?

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  27. reubee (22 comments) says:

    Its not just building consents they need to tighten their act up on. I own a 3 bedrom house on a 933m2 site in an Auckland City Suburb, and have been trying to renovate it into a 4 bedroom house with garage (so plenty of room, no height to boundary etc, ought to be simple). The architect finished the plans in October 2007. Since then I have been battling the processes and guidelines (or lack of them to be more precise) put in place by ACC around stormwater and 2 years later still haven’t even got to the stage of submitting a building consent.

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  28. MikeNZ (3,234 comments) says:

    Lucia
    Now that’s a law I’d like repealed.
    Why can’t council have the same laws as us and business.

    Someone owes you, you get a judgement, then attach assets, not straight to claim their house.
    That gives power to the state that individuals and businesses don’t have.

    Couple that with Labour changing the way we can hold local govt to account with the ombudsman.
    this means council have feerer way to spend our money and our redress is limited.
    if we withhold our rates in protests they just take the house.

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  29. lastmanstanding (1,200 comments) says:

    gazzmaniac and kaya

    I was tempted to just go ahead and build and if it hadnt been visible from the road frontage I would have done so

    I even had to get the permission of the 2 neighbours across the road as the rule had changed as to distance to boundary since the house was built 30 years ago.

    then the Council tried to argue I needed a survey in case the hand rail was 50mm YES 50mm too close to the front boundary.

    When I pointed out to the Council that they were my nieghbour and I hoped in a neighbourly manner they wouldnt force me to the cost of a survey they relented.

    BTW After many many years of dealing with many Councils in a professional capacity regarding building projects a tip.

    Try to be nice and use humour as I did in the boundary issue. They are used to 99% of people going ape shit so when they come across a relaxed good humoured one it tends to disarm them and they give way on many issues

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  30. burt (7,789 comments) says:

    lastmanstanding

    Excellent tip. I agree. The other big winner is to use the right buzz words. Having had a request turned down I re-submitted it with greater emphasis on sustanibility – some thing, just different spin in the language to describe what and how. Sorted….

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  31. Alan Wilkinson (1,812 comments) says:

    maurieo and Darren are correct that given the chance, Councils will just send out even more idle requests for unnecessary or redundant information than they do already.

    There are two possible ways to prevent this. First require these requests to be sent out within 3 working days rather than when the 20 days are almost up. Second, provide for additional rebates where the applicant can show the Council already had the necessary and sufficient information.

    However, these are all just bandaids on the festering wound. The real solution is to make the Councils responsible for health and safety only. Let quality and durability be the responsibility of the designer, builder and purchaser.

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  32. southtop (262 comments) says:

    Q. Do you guys know how many people work in local government?
    A. About half of them

    Local govt has become the spawning ground for representatives of the closet green movement and the shiny seat brigade completely protected by legislation like the 2002 Local Govt Act.
    I dont think this move will have the desired effect as mentioned by many above the shiny seats will simply find ways of adding cost and employing more sloths.

    A complete cleanout is required. Reagan’s nine most dangerous words in the english language again spring to mind.

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  33. berend (1,630 comments) says:

    What a great thing to be a government! With the stroke of a pen, the world changes for the better. Shorten waiting lists? Just lower funding if targets are not met. Too much crime? Less money to the police. Etc.

    Only a blue liberal can believe in the fallacy that this would actually work.

    These are not market based incentives DPF, they are pseudo-market, socialist incentives, and those will never work. I will predict that somehow no funding will be but, the councils will be seen to have improved their 20 days period, but somehow magically not a iota will change.

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  34. kiki (425 comments) says:

    This will teach the rate payers a lesson. Nick needs his pills again.

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