Boot Motions » Council meeting 27 July 2011- WorkBoot dig #1
That Council engage Mr Paul Cavanagh QC to provide independent advice on the costs and legal considerations regarding the adoption and withdrawal of the proposed district plan and landscape variation by 20 August 2011.
Many claims have been made about what Council’s legal obligations are regarding this process. With five new councillors not familiar with RMA process now on council, it is important that Council has robust independent advice before making significant decisions with ongoing legal and financial consequences.
The preliminary advice received from the Council’s legal and planning advisors on the ongoing funding of the review draws into question their independence by virtue of their having a commercial interest in receiving the recommended monies and the resultant future monies if the plan and variation are adopted and proceed to the Environment Court appeals process.
Mr Cavanagh is a recognised authority on RMA law and his advice would provide Council with the robust and reliable basis to make sound decisions on the important matters before us. I know Mr Cavanagh only by reputation.
The facts of the matter are described as follows –
As a result of further work reviewing the information that is available to us as Councillors I now believe the resolution passed regarding funding of the district plan on 27 April 2011 was passed on the basis of confused or possibly even wrong information provided to us in the meeting by the Chief Executive and his appointed legal advisors.
Again as I understand our position as councillors in such a situation we are able to rely on having acted in good faith under advice provided to us by the Chief Executive in terms of the Local Government Act 2002.
However if we become aware that the information we have relied on is clearly or even possibly not correct I am advised that we may not be protected unless we act to ensure that:
first, we re-visit the issue of the information supplied and
having sought clarification from the parties that supplied the information in the first place, if that information was misleading us that we re-debate the issue and ensure that we then act on the correct information.
The issue and actions by way of resolution that I am concerned about are as follows:
Resolution passed contravened previous resolution
It was resolved on 18 February 2011 in relation to the recommendation to approve $704,500 expenditure towards the proposed district plan -
'That Council let this item remain on the table until it receives the report which will fall out of an independent review of the financial health and sustainability of the organisation to be undertaken by PJ and Associates'
However having not received the report, on 27 April 2011, Council voted to approve the expenditure.
Initial verbal advice from Philip Jones, PJ and Associates Ltd
This workshop was public excluded for no valid reason. The details are contained in appendix A to this document. I will leave it up to the Mayor whether he wants to continue to hide this information from the ratepayers
At the workshop facilitated by Philip Jones on 20 April 2011, Council was advised in terms of its indebtedness that it (public excluded see Appendix A)
Advice on potential cost of appeals by Andrew Green, Brookfields
The workshop held on the morning of 27 April 2011 was public excluded for no apparent reason. Therefore I have appended the happenings of that workshop to this document as Appendix B. There is no good reason why the public should not have access to this information, however I am obliged to leave it up to the Mayor as to whether he wants to continue to hide the information from the ratepayers.
(public excluded See Appendix B)
What can be said is that with in excess of 500 submissions on the proposed plan, the cost of appeals against decisions in terms of mediation and court is likely to be in the vicinity of $1 – 2 million.
Post the meeting I realised that given the 500 initial submissions on the landscape variation that appeals on this, obviously very controversial, variation would on the same basis of reasoning be a further $1 -2 million.
Overall then it is reasonable to expect, any other escalating costs of the variation process aside, that there are ongoing expected costs of a further $2 - 4 million.
Such expenditure would necessarily result from a Council decision to adopt the amended proposed plan.
The Council whilst not willing to wait for receipt of the report, as previously resolved, nevertheless was still aware of the contradiction between the verbal advice of PJ and Associates at point 2 above, and of the predicted ongoing costs as advised by Brookfields.
Yet Council proceeded to approve the funding regardless of the advice.
The advice from the Chief Executive and Brookfields/ BECA
The advice of the Chief Executive and Brookfields / BECA was received in public excluded although there was no valid reason for excluding the public. The details of this advice are included in Appendix C and I will leave it up to the mayor as to whether he wants to continue to hide this information from the public.
The leading reason given by the Chief Executive and his advisors for recommending approval of the funding was (public excluded see Appendix C)
The advice provided in the combined Brookfields/ BECA report dated 11 April 2011 includes the following statements -
(public excluded see Appendix C)
The Chief Executive furthered this claim made by Brookfields/ BECA with the following five statements in support of his recommendation.
(public excluded see Appendix C)
During the preceding workshop with Brookfields and BECA, I asked Andrew Green two questions to which he gave answers as follows-
(public excluded see Appendix C)
Section 79 RMA states -
Review of policy statements and plans
(1)A local authority must commence a review of a provision of any of the following documents it has, if the provision has not been a subject of a proposed policy statement or plan, a review, or a change by the local authority during the previous 10 years:
(a) a regional policy statement:
(b) a regional plan:
(c) a district plan. (my emphasis)
Note this statement from Long Term Council Community Plan.
"Future plans (July 2005 - June 2007)
• Continuing to implement the Mangawhai Future Project
• Continuing to develop community plans
• Implementing Council's monitoring strategy and reporting on outcomes
• Continuing the review of the District Plan (2005/06), including plan objectives and policies, reserve zoning, heritage, designations, engineering standards and hazard provisions
• Notifying the Proposed District Plan in 2007
• Administer Biodiversity Fund
In other words the Review of the 1997 DP had begun in 2005/06 and was to continue to where a proposed plan would be notified in 2007."(my emphasis)
For the removal of doubt here is the Chief Executive's report from the Kaipara District Council 2004 - 2005 Annual Report.
"Policy and Planning
Council has embarked on the Kaipara District Plan Review and Development
Contributions Project in late 2004 with a scoping report produced in April 2005. The scoping report outlined the initial issues and options with a particular focus on subdivision and land-use, landscape, ecology and the implementation of the Mangawhai Structure Plan. This project is scheduled over three years and will involve extensive consultation with stakeholders and the community. This is the first comprehensive review of the Council's District Plan which was adopted in 1995. " (my emphasis)
Given the fact above:
The review was commenced in 2004
There is therefore no requirement to commence a further review until 2014.
Furthermore a review will be required to be commenced by 2014 regardless of whether the proposed plan is adopted or not. The withdrawal of the plan would make no difference to this provision.
The Chief Executive's advice appears to have misled the Council.
In his defence, if the above facts and conclusions are correct the Chief Executive so misled the Council in the presence of the legal and planning advisors to Council.
The fact that the legal advisors and planners to Council were present and did not seek to correct what appears to be misleading advice does of course not excuse our Chief Executive who reminds us of his experience and expertise on these matters but does raise the issue, again if I am correct, as to whether or not we, as Councillors, can have confidence in their independence of management and professional competency.
The CEO's costings provided to date for the proposed plan may be incorrect
Once again the details were provided in public excluded. There is no reason why these details should not be disclosed to the public, however I will leave it to the Mayor to decide whether he wants to continue to hide this information from the public.
The Chief Executive advises us in his report of 14 April 2011 that the cost to date for the district plan review is (public excluded see Appendix D)
The costings to date provided to me by the Mayor and subsequent resolutions passed are very different to this figure and are as follows:
As at 30 June 2010 Council had spent $2.2 million on the proposed plan from the general rate.Council had previously approved a loan of $1.2 million to fund the proposed plan.
As at 15 December 2010 Council had drawn down approximately $980,000 with the balance proposed to be drawn down by the end of the financial year.
In December 2010 Council approved further funding of the landscape variation to the proposed plan by way of a loan for a further $718,500.
In April 2011 Council approved a further $705,410 towards proposed plan deliberations
Taking the above figures results in the following total approved to date:
$4,118,500 prior to CEO’s report (c.f. $ (public excluded see Appendix D) in the report of 14 April 2011)
$4,823,910 approved to date
Which figure is correct? (public excluded see Appendix D) or $4.8 million.
If the Council decided, on advice, to withdraw the plan there would be further benefits:
First, the work that is done to date would still provide the foundation for the next plan notification. In short we would gain a period to get all of the components together, rather than releasing with part of the plan missing. We could also take on board and seek to reduce the conflicts that have arisen from the submitters in a re-drafted plan.
Secondly, we would gain costs savings in our staff requirements as we will be able to avoid having to staff up for the work required to deal with all the objections.
Thirdly, our new executive team will have time to get to the other more pressing priorities, such as being able to produce full and timely financial statements.
Fourthly and finally, we can ensure that while focusing on getting our debt under control we minimise the possibility of default by not taking on more debt.
In my view we, as Councillors need to get real and correct answers. To allow such apparently obvious anomalies to remain uncorrected would be to fail in our duties to the ratepayers.
Issues relating to the conflicts of Council Officers
Our Chief Executive
As is well known, the Chief Executive is in a relationship with Venessa Anich who is a senior planner employed by BECA.
There are three issues that concern me over the way we are being asked to deal with BECA.
Firstly, BECA is an employee owned company and her remuneration is directly linked to her status as an employee of BECA, which is a beneficiary of Council contracts. In my view having had the opportunity to get to understand what we should be doing when confronted with a situation such as this, this conflict should be disclosed whenever we are considering or discussing remuneration of BECA, and the CEO should always be excused and absent from such deliberations.
Secondly, to complicate matters further Ms. Anich is seconded to Kaipara District Council at Dargaville. A secondment of the nature disclosed (i.e a full-time position) is in essence an employment by Council. This raises the appropriateness of Ms. Anich being actively engaged in the management of this process. I am now, having had time to understand and reflect on the situation, wholly uncomfortable with this situation. I do not believe it is appropriate for this secondment to continue and if there is to be a secondment from BECA it should be a member of that organisation that is not so conflicted. I believe the current situation reflects badly on us as Councillors and even more so on BECA and our CEO, and should be rectified by replacement of Ms Anich immediately.
Thirdly, I believe that the issues raised above in terms of the accuracy of advice on our options on considering the plan process and the apparent cost-overruns and what historically appears to be a lack of fiscal control are by-products of this extra-ordinary situation.
BECA/ Brookfields, the Council and the ratepayers
BECA and Brookfields have an ongoing direct commercial interest in their relationship with Council. The approval of the recommendation to approve the further funding of $705,410 in relation to the plan (of which sum BECA and Brookfields will be the beneficiaries) will require the Council to borrow the money .
BECA and Brookfields are both very well aware that the Council has massively increased its debt and that further debt will simply be a direct impost on current and future ratepayers.
What alarms me is that knowing this we do not have any sense of fiscal responsibility from these professional organisations when advising us. Simply, in my view they know that our very small, and economically dis-advantaged ratepayers should not be, in these difficult times, burdened with expenditure that will run up further debt. Is there any such note of caution in their advice to us? Not that I have heard. To the contrary any enquiry as to whether expenditure can be avoided is met with advice that, as I have noted above, supports the CEO's spendthrift ways.
The facts are:
we are not a wealthy district
our ratepayers are hurting
there is no economic justification for our Rolls Royce proposed plan
we are congratulating ourselves on being leaders when we have no track record in innovation and growth bringing benefits to our ratepayers, quite the reverse - our major project EcoCare has run at least 100% over budget with no proper independent review and understanding of the lessons learnt
we have an expensive re-organisation of Council management underway with no targeted savings while we have an accounting system that cannot do what every small business in New Zealand is required to do – produce financial statements on time and provide us with cashflows so we know where we are going.
And yet we have the temerity to burden our ratepayers further before getting our house in order.
The adoption of the amended proposed plan
The proposed plan and its landscape variation have not been aligned in terms of process. This means that the Council will resolve to adopt/ reject the amended proposed plan in September 2011 before the hearing on submissions on the landscape variation have even commenced.
The landscape variation was notified in accordance with an Environment Court direction to do so. The submissions on the landscape variation are to be heard by two independent commissioners – elected Council will have no input into these decisions.
If the Council resolves to adopt the amended proposed plan, I cannot see how we will have not placed Council in the untenable position where it has no choice but to adopt the landscape variation in whatever form it comes back from the appointed commissioners.
This is not a situation that has been foisted upon the Council at the last minute. We are aware of this situation many months ahead of it occurring. I ask each Councillor to consider if we as a Council proceed to adopt the amended proposed plan, will we place ourselves in terms of the landscape variation, in a position where we are unable to exercise our duty as sworn in oath to –
“…faithfully and impartially, and according to my best skill and judgement, execute and perform, in the best interests of the Kaipara District, the powers, authorities, and duties vested in or imposed upon me as a Councillor of the Kaipara District Council…”
Multiple Environment Court appeal processes should be avoided at all costs
The big costs of the plan review process really start to mount up once the Environment Court mediation and hearings stage is reached. At that point elected Council has lost control of the process and no longer has grounds under Schedule 1 clause 8D RMA to withdraw the proposed plan.
In my view it makes simple and plain sense to avoid multiple repetitions of this process – especially given that in our case we have no funds and will have to borrow all monies required to complete the process.
At present we are facing multiple rounds of the appeals process-
Landscape variation to proposed plan
Proposed Regional Policy Statement
New Zealand Coastal Policy Statement
The way forward
I believe that a possible financially and legally prudent way forward is to withdraw the proposed plan in accordance with schedule 1 clause 8D RMA. As far as I can determine from my research this can be done for any specified reason.
There are very good reasons to do so – that we as a Council wish to avoid needlessly burdening our ratepayers. We can do so by consolidating all components of the plan prior to entering into appeals and thereby avoid the cost of entering into multiple rolling appeals processes.
This would allow the halting of expenditure on both the proposed plan and landscape variation processes which are both currently running up significant costs.
I believe that given the seriousness of this situation, as a Council we should now promptly be seeking independent legal advice to us as Councillors as to our duties on the costs and legal considerations of adopting and withdrawing the proposed plan.
Degree of Significance
In my view this matter is not significant in terms of Council’s Policy on Significance.
Consideration of the Four Well-Beings (Community Views)
Council faces significant future costs if it proceeds with the district plan process. There are no cash reserves to fund these costs. The costs are not able to be met through the existing LTP. All such expenditure would need to be borrowed and the capital repaid and serviced by rates increases.
Borrowing and servicing $4 million alone would require at 7%pa, a further permanent 2% rates increase before amortising the amount borrowed. To say amortise the debt with interest over 3 years would require monthly payments of $268155.94
Just because Council has spent substantial ratepayer funds and accumulated debts that must be serviced by rates does not, in my submission mean that Council has some moral duty to continue to waste the ratepayers money when it can ill afford to do so. It is important to determine whether Council in fact has any legal obligation to continue to borrow and spend.
In my view, there are no social impacts of seeking the advice. The social impacts of not seeking the advice are the potential for further unnecessary cost through rate increases on the people of the district and the lack of funds to use on other needs of the community.
In my view, there are no cultural impacts of receiving the advice
In my view, there are no environmental impacts of receiving the advice
In my view, there are no Policy Impacts with regard to seeking this advice.
The cost of seeking the required advice, could I am advised be in as little as $5000. Relative to the overall spend to date of $4.7 million or the likely ongoing costs totalling a possible $4 million and needing then to be repaid, the cost of the advice to work out whether it is possible to save around $ 4 million is, again in my view, an expenditure that we as Councillors would be foolish not to make.
Legal considerations/ Delegation
In my view, there are no legal considerations beyond seeking the advice.
Assessment against Standing Orders
3.3.2 Chairperson to decide states -
“The chairperson is to decide all questions where these standing orders make no provision or insufficient information, and all points of order, and any member who refuses to obey an order or ruling of the chairperson shall be held guilty of contempt (see Standing Orders 3.1.1, 3.13.6 and Appendix C)”
Not relevant as the Standing Orders make clear provision for the rules of notices of motion at section 3.10.
3.10.2 Refusal of notice of motion states –
The chairperson may direct the chief executive to refuse to accept any notice of
(a) Is disrespectful or which contains offensive language or statements made with malice; or
(b) Is not related to the role or functions of the local authority; or
(c) Contains an ambiguity or a statement of fact or opinion which cannot properly form part of an effective resolution, and where the mover has declined to comply with such requirements as the chief executive may make; or
(d) Is concerned with matters which are already the subject of reports or recommendations from a committee to the meeting concerned.
Reasons for refusing a notice of motion should be provided to the proposer.”
In relation to this notice of motion -
(a) It is not disrespectful and does not contain offensive language or statements made with malice; and
(b) Is related to the role or functions of the local authority; and
(c) Does not contains an ambiguity or a statement of fact or opinion which cannot properly form part of an effective resolution, and where the mover has declined to comply with such requirements as the chief executive may make; and
(d) Is not concerned with matters which are already the subject of reports or recommendations from a committee to the meeting concerned.
3.11.1 First repeat where notice of motion rejected states –
“When a motion which is the subject of a notice of motion has been considered and
rejected by the local authority, no similar notice of motion which, in the opinion of the chairperson, is substantially the same in purport and effect may be accepted within the next 6 months unless signed by not less than one third of all members, including vacancies.” (underlining added)
This matter has not previously been presented as a notice of motion and therefore is not a repeat notice of motion.
Therefore there is no reason for the notice of motion not to be accepted.