An $11 million mistake

June 22nd, 2013 at 8:50 am by David Farrar

Martin van Beynen at The Press reports:

Get ready to pick up the tab for an $11 million insurance mistake by .

The error arose when council staff failed to insure the new $21m composting plant in Bromley when it opened in 2009.

An investigation by The Press into council’s insurance shortcomings has confirmed ratepayers will pick up the tab for the plant’s repair as no government subsidy is available.

The problem comes to light as a raft of insurance difficulties with council assets emerge, including questions over crucial valuations.

General manager corporate services Paul Anderson said the mistake was a “straightforward clerical error in my team so I’m responsible for that”.

The plant was insured while it was built but it was omitted from a schedule of completed assets.

“My team didn’t pick it up; our brokers didn’t pick it up,” Anderson said.

Asked whether disciplinary action was taken against the staff members responsible, he said the “insurance team” was now “not the same as it was at the time”.

So no one will be held accountable. Hey its only $11 million.

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30 Responses to “An $11 million mistake”

  1. thedavincimode (6,539 comments) says:

    What is it about Canterbury and its pollies and bureaucrats? Are they so fixated with sheep shagging and inbreeding that they just don’t have the capacity to run things properly? Is this a smog hangover? What is it?

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  2. wat dabney (3,696 comments) says:

    Why is a council building and operating a composting plant in the first place? Councils are incompetent at everything apart from confiscating workers’ hard-earned money and pissing it away on their grand schemes.

    So no one will be held accountable.

    But in the very piece you post it says ‘General manager corporate services Paul Anderson said the mistake was a “straightforward clerical error in my team so I’m responsible for that”.’

    So I’m sure he will pay the consequences.

    Nah, only kidding. He’s riding the public-money gravy-train.

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  3. peterwn (3,168 comments) says:

    Ironically, it was probably more economic to leave the facility uninsured (unless your crystal ball told you an earthquake was imminent). It is like owning a car that is several years old, and replacing it if it is damaged, while inconvenient, is not the end of the world. So you save premiums by taking out third party only insurance – in case you T bone someone’s Porche.

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  4. hj (6,393 comments) says:

    So what is this governments plan for a “great” earthquake on the alpine fault (which on average is due now.) Given that it will knock out many hydro dams (“not a quick fix”)? Nationals plan is population increase without energy security.

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  5. orewa1 (428 comments) says:

    Simple really. Someone in his team fucked up massively. There were apparently no checks and balances – systems were inadequate. Ratepayers lost a vast sum. Mr Paul Anderson earns the big salary and carries the can. So he should have offered his resignation as soon as his department’s failings came to light. QED.

    What the hell ever happened to accountability in the public sector?

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  6. flipper (3,595 comments) says:

    Curious that just yesterday The Press reported that the Council expected to receive an additional “$12 million in development contributions (AKA extortion money)” and that this might drop the rate increase by a basis point or two.

    Marryatt should be accountable. Is he not also Chair of the LocBods Insurance Org?

    Electing Dalzeil or any other person as Mayor come October will not solve their problems, which are a product of the crewed up Loc Bod legislation.

    The Government should take over the whole caboodle, appoint a Commissioner, and let them scream. The rest of NZ are in effect the “Receivers” for this bankrupt Loc Bod. We pay the bill, bit they want the say on how much and on what. And all the while they keep their little toys, like Orion.

    F in the Head!

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  7. George Patton (349 comments) says:

    Time to be hardnosed about this.

    Paul Anderson should resign.

    No need to rebuild a composting facility either. Just not a priority.

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  8. wat dabney (3,696 comments) says:

    Ironically, it was probably more economic to leave the facility uninsured (unless your crystal ball told you an earthquake was imminent). It is like owning a car that is several years old

    It’s a $21m capital asset. It’s like leaving your house uninsured, rather than your car.

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  9. Reid (15,981 comments) says:

    What is it about Canterbury and its pollies and bureaucrats?

    Let’s not hallucinate that this conflated with Fat Bastard’s consent threat have anything to do with each other, shall we?

    Obviously its intended to have that effect, but let’s not be mental and fall into that thinking. After all, the consent threat from Fat Bastard is a bunch of hot air – when Fat Bastard made the threat the data from Williamson in response to a RadioNZ interview with Parker and the CCC General Manager was that consents were being issued on time 75% of the time, meaning Fat Bastard was making all that fuss over a mere 5% failure rate, since the target was 80%. 5%? And all that fuss? You KNOW it’s propaganda when that happens.

    And if its propaganda then, its propaganda now, since this is just a line item on a spreadsheet. Sure, an expensive 11m line item, sure, should have been double and triple checked, sure, should not have happened. But in the context of everything, it’s a line item. Not the crime of the century.

    So don’t fall into Fat Bastard’s little plant in The Press like a useful idiot. That just makes you look mental.

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  10. Pauleastbay (5,035 comments) says:

    There is some absolute gold on here already this morning

    What the hell ever happened to accountability in the public sector? I would have thought that akin to Father Christmas and that pot of gold thats arrives with rainbows.

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  11. Auberon (871 comments) says:

    What commenters here don’t seem to be aware of – and that’s not their fault – is that this has conveniently become public some weeks AFTER Paul Anderson has resigned from the Christchurch City Council to take a role running skifields in Queenstown.

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  12. flipper (3,595 comments) says:

    Peterwn…

    The State (that is to say the Crown) still operates without insurance – that is to say it is self insured – does it not?

    The problem I have is that under existing law Loc Bods cannot go bankrupt. The Crown (you and I) underwrite their activities.
    Then we sometimes get amending legislation to cover massive debts and inequities, like in Kaipara
    Crazy.

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  13. ross69 (3,652 comments) says:

    The article says:

    “After insurance payouts and government subsidies, the council still has to find $1.38b to fund quake recovery costs…”

    In that context, $11 million is peanuts.

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  14. flipper (3,595 comments) says:

    A $million here and a $million there, and pretty soon you are talking real money
    (paraphrased from someone, can’t remember who)

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  15. Pauleastbay (5,035 comments) says:

    In that context, $11 million is peanuts

    You pay it then if its so little

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  16. lazza (358 comments) says:

    Christchurch City … Kaipara District Council … “same diff” as to “Accountability”… Not!

    Cept in Kaipara’s case, its around $50 Million and Court action coupled with a Government enquiry may (lets hope) bring culpable management, elected members, consultants … the lot, to account. Time we did eh?

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  17. berend (1,634 comments) says:

    All drawing 6 figure salaries, but accountability? Nah, that’s for the ratepayers.

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  18. orewa1 (428 comments) says:

    Ross – do you perhaps work in the public sector?

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  19. holysheet (272 comments) says:

    What commenters here don’t seem to be aware of – and that’s not their fault – is that this has conveniently become public some weeks AFTER Paul Anderson has resigned from the Christchurch City Council to take a role running skifields in Queenstown.

    If I was his new employer and I found this was not disclosed at interviews I would be very pissed. In the private sector, we take lying to an employer very seriously. But how difficult is it to run a skifield?

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  20. hj (6,393 comments) says:

    Councils take the blame when things go wrong but what role did those who stood to gain from all the infrastructure in Kaipara have to play? is there no influence on councils? Are not developers in there pushing their barrows?

    Am I the nutter here? Am I the wacky conspiracy theorist?

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  21. hj (6,393 comments) says:

    From a past president of the South Island branch of the Property Council
    “Obviously the developers couldn’t buy the local politicians and public officials off fast enough in Dallas Fort Worth to overcome the zoning impediment – but they have been trying as this article Fed Up: Texas Monthly November 2007 illustrates. It goes on pretty much everywhere of course – but only illustrates how zoning tends to assist in inflating prices and stalling supply responses.
    http://www.scoop.co.nz/stories/BU0711/S00303.htm

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  22. duggledog (1,362 comments) says:

    There’s one at Waitakere dump as well. It’s been sitting there rusting for years, hardly ever used.

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  23. MT_Tinman (2,995 comments) says:

    Flipper, I agree.

    Isn’t it amazing what The Press’ Let’s-elect-a-communist campaign can come up with?

    Far better than the normal press-release slime laziness.

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  24. MikeG (399 comments) says:

    I guess it’s a bit like the NACT Govt not signing the ‘Bunker Convention’ which meant that the taxpayer has had to pay at least $12 million more rather than getting it from the shipping company. I don’t remember Farrar talking about accountability on that one.

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  25. Rich Prick (1,557 comments) says:

    That’s ratepayer money, and it’s not lose change down the back of the sofa. Who cares about the insurer’s reinsurance woes, that’s not the council’s problem. The council ought to sue on its insurance contract. If that doesn’t work I’d be looking at the broker who sold this lemon.

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  26. thaksinsproposal (40 comments) says:

    Martin van Beynen at The Press consistently produces good articles.
    He is one reason to keep buying the Press.

    thedavincimode (4,839) Says: June 22nd, 2013 at 8:56 am says
    What is it about Canterbury and its pollies and bureaucrats? Are they so fixated with sheep shagging and inbreeding that they just don’t have the capacity to run things properly? Is this a smog hangover?

    Mr Davinci sheep shagging has been against council regulations for years.. everyone knows we have sheep there but you can not shag them. Not even Sue Wells

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  27. thaksinsproposal (40 comments) says:

    flipper (1,761) Says:June 22nd, 2013 at 9:45 am
    “Curious that just yesterday The Press reported that the Council expected to receive an additional “$12 million in development contributions (AKA extortion money)” and that this might drop the rate increase by a basis point or two.
    Marryatt should be accountable. Is he not also Chair of the LocBods Insurance Org?
    Electing Dalzeil or any other person as Mayor come October will not solve their problems, which are a product of the crewed up Loc Bod legislation. The Government should take over the whole caboodle, appoint a Commissioner, and let them scream. The rest of NZ are in effect the “Receivers” for this bankrupt Loc Bod. We pay the bill, bit they want the say on how much and on what. And all the while they keep their little toys, like Orion.”

    yes flipper Christchurch is now scam city, and I could elaborate..Flipper is correct things have gone to far, this is 50 billion dollar project, we can not afford such a gayhappy Mayor or such a sociliast Mayor. Good people did not putnames forward .
    Enter here now NZNat government, I will open the gates myself..it is time to stop the graft

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  28. Rufus (621 comments) says:

    “What the hell ever happened to accountability in the public sector? “

    Oh the naivete, it burns.

    Ross: “In that context, $11 million is peanuts.”

    And compared to the minimum wage it’s astronomical. Asinine – what’s your point? Ratepayers are going to be bled to cover this. To them it’s not peanuts.

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  29. Rich Prick (1,557 comments) says:

    “In that context, $11 million is peanuts”

    In the context of a $100m council, that’s an 11% rate increase, just for one asset fuck-up, take the overall insurance shortfall and we’re talking a 1000% rate increase. But it will be spread by debt …. that can’t be afforded. That insurer needs to be sued forthwith.

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  30. Mike Readman (358 comments) says:

    Lianne Dalziel will fix all this crap. Go Lianne!

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