Roger Childs asks if ratepayers are happy with Kapiti Coast Council (KCDC) having a punt on derivatives and losing some $10 million.
He asks: ‘Did they have a license to gamble?
… we are not aware of any other councils in New Zealand that invest in derivatives. Dr Mike Reid, Principal Policy Advisor, Local Government New Zealand (LGNZ)
Are Kapiti citizens concerned about KCDC playing fast and loose with their rates?
Official Council accounts show that they have lost more than $10, 000,000 over three years wagering on derivatives.
Perhaps the TAB would give better odds
Would gambling at the TAB have been a better bet? How about on two flies crawling up a wall? What about depositing the money in a bank investment account?
One of my friends responded Are they allowed to do that? Surely it’s illegal. As Dr Reid from LGNZ implies in the quote above, that KCDC may be the only Council that does this kind of gambling with rate-payers money.
(derivatives are basically arrangements where a party take a punt on whether financial assets will increase or decrease in the future. For example – on whether bank interest rates or the value of overseas currencies will go up or down. This is a strategy for managing assets based on the philosophy that taking risks brings rewards.)
Build a new library?
$10 million would go a long way towards demolishing the old building and erecting a state of the art library for Waikanae. KCDC stands condemned for the gross incompetence in not heading the complaints about the leakages and toxic mould at the old library over a period of ten years.
Now money is being paid out for storing the books – $32,000 annually – that can’t fit in the pathetically small pop-up library in Mahara Place. (See the article below.)
In recent weeks the Lions Club has been sorting thousands of books for the upcoming Waikanae Book Fair using the old swimming pool building in Raumati Beach. Why not use this Council owned building to store the “surplus” Waikanae books?
Other wasted expenditure
Guy Burns has pointed out that in the last three years KCDC has doubled its public relations staff to eight. (See the October 3 article.)
A former councillor has pointed out that 10 years ago one person did the job.
What do these PR people actually do and are they worth their $80,000 + salaries? In Guy Burns view: Public Relations staff are perceived as spin-doctors; whose job is to manipulate public opinion away from the cold truth of reality.
On the subject of salaries, it may not be well know that 20 KCDC top managers earn $300, 000 or more.
Furthermore, despite a very large staff – one of the biggest payrolls per head of ratepayer population in New Zealand – the Council spends millions on consultants. Why can’t the highly paid employees with specialist qualifications do the jobs?
Then we have a last minute decision in a 26 September “behind closed doors” Council meeting, approving a purchase price of $1.43 million for the two properties located at 26 and 29 Marine Parade (with a combined capital value of $1.66 million). The KCDC press release states – This acquisition will be funded from the Council’s strategic property and land budgets.
As of 26 September people were starting to vote for a new Council, so shouldn’t discussion on committing $1,43 million on property purchases have been left to the incoming elected representatives?
Library book budget
Readers are well aware that KCDC made a late decision to cut the book budget for the next year by 47%. The slash was $191,000. When you look at the gambling losses, wastage of money and bloated salaries outline above, the decision was an extraordinary one in view of the fact that over 85% of Kapiti citizens are library users.
If you haven’t voted yet, bear in mind that the Council responsible for approving the various financial decisions outlined above was Mayor Gurunathan and Councillors, Elliott, Michael Scott, Benton, Holborow, Cardiff, Cootes and Buswell. (These are the people seeking re-election.)