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Council Meeting - 9 December 2015

Hauraki Rail Trust

There is much that cruises beneath the surface on this project that has been well and truly hidden from public view since its outset. Problems with governance, management, staffing and general operations have been obvious, but very difficult to finger. The 2014/15 Annual report continues this commitment to obfuscation.

What has been obvious has been the unwillingness of those appointed to the Trust to continue for any length of time – clearly, once they find out the depth of the underlying problems, they appear to endeavour to put as much distance as possible between themselves, and the operation of the Trust. Only the iwi representatives maintain continuity.

All the Council trustees have or are about to depart, along with Leach’s ‘best mate’ – Warren J. Male of Coromandel FM fame – he could not wait to get off once he found just how deep were the problems being faced by the Trust, and was replaced by Goudie, who followed him shortly after out of the revolving door.

No one departing revealed the source of their concerns but you may gather hints from the  Annual Report that indicate Council Settlors considering a new model that incorporates “a new skill set and governance expertise, and reviewing administrative and management support roles.”  

The Trust indicates that it has developed policies for Conflict of Interest, Sensitive Expenditure and Fraud Prevention in accordance with Audit NZ findings – effective from February 2015, but inexplicably with a review date of August 2015 – very puzzling!

Maintenance appears to be a major problem, even to the extent that the contractor needed to resign due to “personal commitments,” and the Trust appears unable to decide how to replace him. Meanwhile complaints about noxious weeds and overgrown vegetation continue unabated, and continued compalints about the Paeroa – Te Aroha track surface are a continuing concern, and a number of other maintenance issues are listed as falling badly behind, and requiring additional funding “from outside agencies.”

The Trust reports excellent progress in the marketing area, but funding remains a major impediment to the progress of developing the track into a multi-day experience, while incurring year on year losses that are having to be made up from what is blithely referred to as “shortfall funding provided bi-annually by the three participating District Councils in accordance with the Underwriying Agreements.”

The accounts (and the Report) have been prepared on behalf of the Trust by the Hauraki Council – the next audit opinion is due from Audit NZ in mid to late December – it would need to be a dammed sight better than the last. I will be interested to read their comment on the substantial increase in related party creditors and debtors that are listed without explanation.

TCDC’s liability under its MOU is supposed to be severely restricted – certainly it is substantially less than that incurred by HDC, but still came in at $55,800, together with $140,000 owing in respect of the K2K (Kopu to Kaiaua) Feasibility Project. An awful lot of reliance is being placed on the potential of this new sector to ‘balance the books’ in the long run – confidence that is not reflected in any of the documentation provided to date.

Certainly, the benefits to date from the Trail can be said to have accrued unevenly – the Paeroa to Waihi sector is by far the most popular, but there again appears to be real reluctance to provide verifiable track count information to enable a real judgment to be made in that regard. That absence simply reflects the overall reluctance to reveal the true state of affairs surrounding this facility. Readers should brace themselves for another blast from the NZ Audit Office, and Councillors should begin to take responsibility for a change to exercise the degree of control long absent from the affairs of the HRT.

Remember when our CEO replaced Greg Hampton on the Officials Committee. You won’t find his name anywhere in the covering Report – I wonder why?

Coromandel Great Walks

A very interesting change has taken place, without notice, between Ross Ashby’s paper dated 13 November when the Prince2 Structure indicated two TCDC representatives, one DoC and one Manu Whenua representative on the Governance Board – all with votes. But Gary Towler’s Paper dated 28 August shows the TCDC representatives – two (Glenn Leach & Brent Page) with only one vote, Manu Whenua for the purpose of the Cathedral Coast Walk as being Peter Johnston from Ngati Hei.

Read what you like into that piece of power strategy. I can tell you that the Hahei Ratepayers are not impressed at being left out of the Governance role, but Council is struggling with setting up a structure that can deal with all of the many walks that are being proposed by Leach, that go well beyond the Whitianga to Hot Water Beach stretch that represents Ngati Hei’s rohe.

There are literally so many chiefs involved in the process – track managers, construction managers, area managers, project managers, contract managers – you name it, and all with bugger all to do while decisions are made on transport and parking arrangements, let alone the finalising of the Carter parking arrangements at Lees Road.

It is all a giant back-to-front ‘cock-up’ to be sure, and Leach has no one but himself to blame – it was a visionary concept, and may still be, but he has simply not learnt how to take people with him on his wondrous journeys. That was perfectly obvious at the Ratepayers Meeting on 28 November.

I am not even going to start on the likely increased costs, and where that funding will need to come from. This Council has become notorious for cost over-runs on these non-core projects, and the final costings on this deal will prove grossly over budget – of that you can be sure. And the Lees Road over-run will come back on every rate-payer - it being outside of the Great Walks budget!

Thames Indoor Sports Facility

This item appears mysteriously in the Public Excluded section of the Agenda. Heaven knows what it is all about – it also appears on the agenda for the TCB Extraordinary Meeting on Tuesday – the day before Council. It generally means that there are cost over-runs to be reported. The way these have occurred with the Thames Skate Park, nothing would surprise me. If anyone is able to enlighten us on this item, please comment, incognito.

Budget Revisions

Budget revisions at this time of year are always interesting - managers need to get their bids in before Christmas if they are to be able to get their projects completed on time (30 June!) The list of revisions can also reveal a heap of stuff going on that we otherwise would not know about.

Here is Steve Bakers Paper on the subject, togeter with the list of 'unders and overs.'

Note for instance the $455k decrease in Economic Development, and in particular the $231k approved for expenditure on Coromandel Harbour Facilities - the detail of which has been entirely hiden behind Public Excluded until now. Also note that the $680k reduction in Great Walks as this result of the delays that have been detailed elsewhere. Interesting also that they were $61k short on Economic Development rate collections  - there must have been some strong arguments put forward by aggrieved rate-payers - particularly in the B & B sector!

Here are the Capex increases sught:

Thames Centennial Pool Playground surfacing $10,000

Thames functionality library bring forward request $61,721

Longreach development $95,000

Thames Skate Park $68,284

Pottery Lane $40,000 Water Supply renewals $159,000

Rural Fire - vehicle replacement and equipment replacement $50,000

Matarangi wastewater consent renewal $50,000

Tairua water consent renewal $10,000 newal $10,000

Now I do not wish to be super-critical, but it does seem to me that Thames staff have been less than diligent in establishing actual costs during the budget process - their projects appear to 'over-run' with remarkable regularity. Ther optimism surrounding the Skate Park and Porritt Park Toilet Block are a case in point, though they do appear to have cut back on the 'super-duper' Skate Park that was envisaged, but by no means sufficient to match the budget.

I trust that the Public Excluded item on Wednesday is not in order to announce a 'blow-out' in the cost of the Indoor Sports Facility. That would I am sure attract considerable public reaction given the early stage of its development, and the number of 'experts' with their hand in the pie to date. 

There is other stuff coming up on Wednesday that appears insignificant on the surface, but that I am sure will have interesting underpinnings. Watch this space!




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