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Mercury Bay Sports Complex (2)

The one common thread that is evident throughout the wastewater plant debacle, and now the Mercury Bay Sports Complex is the presence of Project Manager Gordon Reynolds, and Group Manager Infrastructure John Whittle. Overspends in major projects that these two have managed or overseen have become par for the course, and in every case, extraordinary excuses emerge towards the end of the projects that to the layman appear almost beyond belief. The Council is inevitably prevailed on just prior to critical meetings to approve overspends, and find ways and means to cover them.

There is substantial information that was not made available to Council at last week’s meeting that is shocking and indicative of the unhealthy relationship between council staff and the principals of Hopper Developments Ltd (Whitianga Waterways) These relationships are almost endemic and inevitable in a small town where there is a dominant developer with a continuing presence, but were unwise if not downright incestuous in the case of Whitianga.

The original (and secret!) deal was negotiated between then Mayor Lux and Hoppers just prior to the 2004 Election. In the absence of Steve Ruru, the document was signed on behalf of Council by current Support Services Group Manager Pam Howat, and Lux as Mayor. It is a disgraceful document that is entirely one sided in terms of benefit, and is indicative of the extraordinary lengths to which Hoppers and their legal advisors were prepared to go to turn Whitianga into an almost permanent cash-cow, and the willingness of Chris Lux to  meet their demands.

The original deal basically said that Hoppers would “gift” the land and build the fields but TCDC would forgo any future reserve contributions for the whole waterways subdivision.  Also, the deal gave Hoppers the right to “sell” their credits to other developers throughout the district. This may be quite important as Hoppers give every indication of moving their operation to Hamilton to build retirement homes – the proposal to build a village at the Waterways appears to be in abeyance.

At the same time the Moewai Road site was also an alternative, and favoured by some Council staff because it offered more options that the Hopper site. Remember that it had been bought very cheaply from the Sheriffs on the understanding that it was to be used for a sports-ground, and this is even tagged on the certificate of title. The big advantage was that it was future-proofed and Council would continue to get Hoppers reserve contributions. 

The Hopper deal had a set time to be enacted in terms of the land being vested. The time passed, meaning the deal was null and void, although Hoppers appeared at the time keen to challenge this. It was at that point that Hoppers proposed a new deal whereby they got a modified but still highly favourable reserve contribution deal and at the same time preserved their position as the ‘preferred’ contractor for the sports-ground development. Of similar concern is the fact that the land Hoppers vested was about 1ha less than what was originally agreed.

Opus then got paid handsomely to consult with the community, and prepare a specification, engineer the works, and obtain consents.  They virtually repeated what had been done in 2005, and there is a view that there were many faults with the design and specifications – Opus is not a recognised sports-field designer, and the work that Opus completed did not go to tender on the open market.

The questions that stand out even today surround the drainage and car-park specs, and the reasons why the decision was made to build all the sports fields at once (shades of the waste-water debacle where need was grossly over-estimated) This appears an abiding characteristic of projects involving  Gordon Reynolds and John Whittle – beware of engineers mouthing off about ‘economies of scale’. 

Further, the quality of build specified for the toilet block is considered ‘over the top’ by many – they could have possibly hired a pre-fab until ready to proceed with the clubhouse building.

I would suggest finally that had greater control been exercised over the contract, greater attention paid to actual needs (cut down the car-parks, tennis courts, grounds, drainage and toilet construction), and with effective project management , Council could have saved millions. Instead, the District has ended up with a glorious $13.5m 'white elephant', with unspecified running costs that will enhance the rates of everyone. The concerted effort to sweep it all under the carpet is clear for all to see.

The manner in which the Hoppers have managed to avoid paying development contributions, and organised a ‘sweet‘ contract is a separate issue that deserves an independent outside audit. Such an audit should not involve the Office of the Auditor General - it has proved totally ineffective in exercising adequate oversight of Council, and instead appears simply intent on buttering up staff and Councillors with anodyne reports. But the chances of this happening are about zero.   




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Reader Comments (4)

An article appeared in "The Peninsula Post" (local Mercury Bay see 27 Sept edition p.5 - website ) saying that:

"Funding for facilities at parks and reserves in Mercury Bay has been slashed.
Mercury bay Community Board chairperson Alison Henry says the board is dismayed the budget for the 2012-2013 has been cut from $200,000 to $20,000.
The cut was made without any consultation with the Board, she says....
The affected funding is in what's called the parks and reserves renewals budget. It covers things like new and replacement furniture, facilities like barbeques and play equipment. it could also cover new planting...".

More information has now come out in todays (Oct 5) edition of the above paper (see p.1) indicating that Mercury Bay reserve accounts, including the renewals account mentioned above, are being drawn down to cover the $1 million shortfall, so the MB Community Board, given the previous comments of their Chair, was obviously left in the dark about the adjustments being made to their budgets despite all the hype about "local empowerment"....!

The breakdown of the $1 million budget blow-out is given as: 1) "A miscalculation of construction cost and a construction spending blow-out, together totalling $417,800" and 2) $583,395 (for) investigating the Mercury bay Community Board changed its mind about where it should go".

The "mind change" referred to here arose from the fact that the previous Council decided to delegate the responsibility of developing the business case for the Sports ground to the MB Community Board. The then Chairman (now Councillor Murray McLean) decided to play 'hardball' with Whitianga Waterways by indicating he was prepared to move to an alternative site (Moewai Rd) and force a renegotiation of the Lux agreement, which as you say was onerous and badly constructed. Hence he got the MB Community board to agree to pointlessly spend the $585,395 which is now being brought to account. The Whitianga Waterways agreement was eventually reviewed as a matter of course to accommodate changed circumstances over time, but was always binding legally, so the McLean moves meant absolutely nothing in the overall scheme of things.

If you remember Bill, I was against this McLean nonsense right from the start and even moved a notice of motion to Council asking them to remove the delegation made by the Council to the Community Board and for the Council to take over further development of the business case. Unfortunately the Council did not recognise the incompetence of McLean at the time, and I could not get the numbers for my motion.

And where is the Councils current Audit committee in all this? When a shortfall of $1 million occurs in the Councils budget, that commmittee should be all over it like a rash, asked pertinent questions and re-assessing Council processes. None of that has happened, probably because its Chairman, another Mercury Bay Councillor, got the wool pulled over his eyes in the first instance re the missing dosh! No point makin' a fool out of oneself now is there?

Also, I would suggest that an objective finding by the Audit Committee would question any increase of Community Board delegations. Using the Mercury Bay sports-complex as a case in point, they would appear to have neither the abilities or capabilities to deal with multi-million dollar budgets.

October 6, 2012 | Unregistered CommenterDal Minogue

Spot on Dal - thank you for the add-on information. This is most enlightening. I have a column going in next week that I will not change though follow up is required in due course on your comment. This situation is just untenable, but most ratepayers will remain ignorant of the situatiuon because of the failure of other media to report it.

October 6, 2012 | Registered CommenterBill Barclay

The 'secret' agreement between the mayor, Chris Lux , and Hoppers was signed and not ratified by full Council in my time. I took this complaint to the Council Audit Committee and after ignoring it for several months they took the advice of then CEO Steve Ruru that our Mayor could sign us ratepayers up to confidential matters without our knowledge. Thus they refused my request to refer the matter to the Auditor-general. This places an enormous power in the mayor's hands where he can by-pass Council without their knowledge and commit a future Council to no-choice actions. Do you feel OK with this?

October 14, 2012 | Unregistered CommenterPeter H Wood,

Thank you Peter - just another example where I think you were correct and Ruru was wrong - very wrong. I took the opportunity to bring it out into the open because the bloody nonsense has gone on for long enough, and Hopper continues the white haired boy of Whitianga in the pockets of everyone from the Mayor down. I hope that the fact that it now out in the open will allow a very grubby episode in the history of the Council to see the light of day. There is already a smattering of interest from elsewhere that I hope may lead to an AG inquiry, but don't hold your breath.

October 14, 2012 | Registered CommenterBill Barclay

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