The need for local body reform

November 3rd, 2012 at 12:04 pm by David Farrar

The Herald reports:

A rates rebellion in a small coastal town is growing as more than 500 Mangawhai residents refuse to pay an estimated $1 million or more to the debt-ridden Kaipara District Council.

Rates have soared this year by about 40 per cent for many residents – more than doubling for some – to help pay off the council’s $80 million debt, which was mainly caused by a $58 million cost blowout for a local sewage treatment system.

The total population is only 19,000, which will be around 7,300 households. So the Council sewage treatment system is a cost of $10,000 per household!

Former New Zealand cricketer Warren Stott, who runs the Riverside Holiday Park, was told earlier this year that his rates bill would increase by more than 1300 per cent from $6316 to $84,850. He’s still not happy with a revised 43 per cent increase to $9050 and worries about the effect on the local economy.

The local economy has challenges already, and this has been the final straw.

Mangawhai Ratepayers and Residents Association chairman Bruce Rogan said residents were refusing to pay because the sewage system was an ever-expanding “Ponzi scheme” foisted on the community without its consent.

Meeting papers show councillors secretly agreed to expand and more than double the cost of the project in 2006 without telling the community for another four years and the council’s own legal opinion shows it has collected about $17 million of rates illegally.


The council resigned in August and was replaced by commissioners. Chairman John Robertson, a former National MP and Papakura mayor, said 90 per cent of residents were paying their rates, including 75 per cent in Mangawhai.

Good the Council has done, but their decisions lived on. The challenge for any reform is how do you stop something like this happening again.

Kaipara District Council

August 14th, 2012 at 3:00 pm by David Farrar

Adam Bennett at NZ Herald reports:

Government appointed commissioners are to take over management of the heavily indebted Kaipara District Council, Local Government Minister David Carter says.

Mr Carter said the council requested the appointment of independent commissioners today after being briefed by a Government appointed review team on the report it would submit to him this week.

Mr Carter ordered the review in May saying the financial situation at the Northland resort town was urgent and action was needed.

Kaipara’s debts total $80.7 million including about $60 million for the Mangawhai sewerage scheme, leading the council to propose a 31 per cent average rate increase, which had ratepayers up in arms.

“Kaipara District Council is facing a range of problems including the size of its debt, invalidity of previous rates, management of its infrastructure and loss of confidence amongst parts of the community”, Mr Carter said today.

“The Council’s request to appoint commissioners under the Local Government Act is made in the best interests of the district, and I applaud that.”

I think local ratepayers will be applauding the decision. This is what happens when debt rises to an unsustainable level.