$2m Mercury Bay Sports-complex Debacle
Sunday, December 23, 2012 at 12:08PM
Bill Barclay

I was not wrong – the cost over-run is now over $2m - (see my posts of 28 September and 2 October for background). This brings the total cost (including the Waterways Reserve Contribution credits, to over $14m.

And if you think that this imposition is purely Whitianga’s, forget it – we all pay through our rates as depreciation and interest comes to account. And as for their rates being held down by the device of switching reserves (depreciation and reserve contributions) around as I have been informed was suggested at the meeting by Steve Baker - if this is the case, then he should explain his statement to the meeting that approved the first $1m cost over-run that all reserves able to be used for this purpose had been exhausted.

The figure of $2m has apparently been arrived at after a thorough examination of the expenditure and commitment by Board Manager Sam Marshal, but I am reliably informed that today’s meeting considered a report from Deloittes who were recently requested by the Mayor to undertake a complete audit of the project. In any event, I will be requesting a copy under the OIA, and I fail to see how it can be kept hidden in terms of that Act. Any hesitancy and I will proceed directly to the Auditor General.  

I also understand that Gordon Reynolds, the Project Manager has submitted his resignation, and not before time. It staggers me that he has been able to hold his job over a series of project management debacles, including the delivery of the wastewater projects. It remains a mystery just where Service Delivery Manager John Whittle stands in all this. I suspect that his redundancy would be much too costly to even contemplate, but would welcome enlightenment on the subject. The entire Castle is in lock-down mode, partially for Christmas, but more particularly because of this extremely embarrassing development.  Even less clear is the position of Leslie McCormick who was Board Manager at the time, and whose stuff-ups are now legendary. Neither attended yesterday’s meeting.  

As for the Maginot Line going up at the Sports-ground - with a cursory examination even ‘blind Ned’ could have seen that we were heading for over-run territory. These are toilets cum changing rooms sufficient for the entire French army, and are grossly over-designed for purpose. Actually, the whole Ground is a gross over-design and appears to be the result of Optus being given an ‘open brief’. By way of example, I am reliably informed that the Rain-bird Sprinkler System is the equivalent quality to that installed on Eden Park, and that the turf is of the highest quality and cost of any available in the country – requiring substantially higher quantities of water than would have been the case with a more modest choice. It appears that all other plans for stage 2, 3, 4 etc., including a massive grandstand were put on hold yesterday, indefinitely. That will make the toilets look even more ridiculous and a constant reminder of the results of grandiose ambition, using other people’s money.  

Our Council will become a laughing stock, and source of annoyance to Mercury Bay ratepayers as the scale of this massive white elephant becomes more widely known, and as annual maintainance and depreciation comes to account. They can barely rustle up a footy team without needing four grounds to play on – the toss-up will be for which ground rather than which direction. But I can remember the assurances that we were given by Cr McLean who has been the principal elected person responsible over the entire process, that Whitianga had footy and league teams to burn, and that the proposed grounds would barely cope with future needs.

What we did not understand was that his motives were actually driven more by the  need to preserve Hoppers presence, and trades jobs in Whitianga. For him to deny (along with Cr. Fox) any knowledge of the current situation is simply outrageous, and stretches credulity. The scale of the ground development is entirely down to him as Chair of the Community Board at the time, and the infrastructure is the responsibility of the current Board under Allison Henry. Fox is obviously less in the gun than McLean and Henry due to his more recent appearance, but for all his vaunted ambition to reduce rates, he should have taken a greater interest in what was going on at the Sports-ground.  

What happened yesterday (if one can draw conclusions form the shouting in the Chamber) was that staff came under the hammer in regards to the entire process including planning, over-run, and the lack of appropriate accountability related to estimates, expenditure and accruals. The Mayor told Robert afterwards that “we cannot keep blaming the previous Council for these stuff-ups” – but that does not reflect what he is alleged to have said in the Chamber – just the usual blame transfer that has become synonymous with his Mayoralty. .

By the way, Thames readers will not be surprized to hear that neither Cr. Connors nor Cr. Hoadley attended this acrimonious meeting. Connors has a job that keeps her from attending on short notice, and Hoadley was obviously busy at home on the North Shore.  

Mayor Leach, who met with Robert Jeffares at around 1.30pm after I had given up at 1pm made the extraordinary claim that the additional $1m over-run would be met partially through an increase in the Sports-ground portion of the rates from $102 to $103.50 per property between 2010 and today – a blatantly spurious claim that just does not add up unless they have suddenly found hidden reserves. In his recorded interview with Robert he failed to explain why it was necessary to have this discussion Public Excluded, other than to claim that it is “a sensitive issue”, and there may be legal implications. Embarrassing is a better description.  

He further claimed that the ‘discovery’ of the ‘over-spend’ had only been made because of the new board structure that gave additional powers to the Board Manager. This is plainly ridiculous – you cannot simply make $2m disappear, and then reappear within the Council accounting process. And incidentally, Sam Marshall along with a number of other senior staff give the appearance of being under considerable pressure over this matter. One thing is obvious – that lack of ability or willingness of any current Councillor to question accounting reports.

What Leach did not say is that there are far greater political implications – it will soon dawn on Whitianga ratepayers that they have been extremely badly served by their elected officers, let alone employees, and the remainder of the District will just as surely become aware of how they have been screwed by an unbalanced allocation of resources in order to meet the needs of Mercury Bay.

Rate increases in Whitianga next year will be substantial as a result of this – Leach’s claim of $1.50 is fallacious, and if not deliberately misleading, reflects his own financial naivety. Of course there will be ‘fiddling the books’ to make it look more acceptable, but this is probably the biggest ‘hit’ on Leach since he was elected, and it will be interesting to see just how he intends to divert attention, and retain essential information to which we are entitled. “Commercial sensitivity” just won’t wash Glenn. He mentioned that a prss release on the matter may not emerge until January - so this and Robert's radio reports (107.4 mhz) are likely to remain the only source of information.

But what about the involvement of the Waterways management and Hoppers directors – Harold Abrahamson in particular – it is they who were anxious to get the construction on their books, and fulfil their side of the secret Reserve Contribution deal they had arranged with Mayor Lux, and that was mysteriously signed off by Lux and current Council employee, Pam Howat – a virtually unheard of process, and  buried from the sight of the previous Council until Ruru was forced to reveal it behind closed doors at its last meeting. This alone is worthy of an investigation by the Auditor General.

It is they, Hoppers who wanted idle machinery and tradesmen put to work, and they who have continually manipulated the situation to achieve their ends. The whole MBSG debacle has a most unpleasant smell about it, and it is certainly to be hoped that the Deloittes investigation has managed to get to the bottom of it, and come up with some answers that will enable the blame to sheeted home. But don’t hold out any great hope – I suspect that whatever they have done will have been within defined terms of reference that will prevent anyone current from being nailed with responsibility.

I sat there in the Chamber for the last meeting of the last Council on 29 September 2010 listening to the extremely detailed submissions by Reynolds, Whittle and Ruru together with the then Whitianga Board Manager, Lesley McCormick and wondering what the hell they were letting us in for. McLean was there as Chair of the Board was a prominent supporter, assuring us that “all the funding is in place, using reserves”, and that this was the greatest thing since sliced bread, or words to that effect.

Hewlett strongly supported it, and Minogue issued an equally strong warning that to proceed with this development was courting disaster, and that a far less ambitious ‘dispersed’ model supplementing existing facilities was all that was required. Those who spoke strongly against the development proceeding were Morrissey, Peters and myself along with Minogue, but in the end, we were persuaded by Ruru and Barriball that if we did not agree to proceed with the major development that we would be in breach of the ‘secret’ agreement with Hoppers/Whitianga Waterways, and subject to expensive litigation. It is specifically noted in the Minutes of that meeting that the Resolution was agreed to unanimously – in itself an unusual notation.

The subsequent contract signed by Barriball/Catran with Hoppers was for the development of 10, rather than 8 hectares on the insistence of McLean, thus incurring further substantial cost through Reserve Contribution offset. But it was for ground preparation and grassing only with a couple of netball courts and car-parks that were required urgently. All of the infrastructure currently under construction was entirely the responsibility of the current Council, who approved it through the 2012 LTCCP. Hence, all current councillors are implicated, regardless of claims to the contrary.




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