Grey Power Calls On Govt. to Urgently Investigate KCDC

Kapiti Grey Power is asking the Government’s top accounts body to investigate the KCDC over its alleged failure to observe its own rules with a $5 million over-spend.

Kapiti Grey Power (KPG) believes that extra funding for the Aquatic Centre, and the upgrade of the Council building, should have triggered the KCDC ‘Significance Policy’ because of the huge increases over budgets.

Land sales to make up shortfall

The original Council funding for the Aquatic Centre was to be $10.5 million, which was further increased to $14 million and then $17million — with the total cost for the project (including public donations) now at about $21 million.

The KCDC plans to fund the additional costs of the Aquatic Centre through sales of land.

In a letter to the Auditor General, Lyn Provost, Kapiti Coast Grey Power says it believes the KCDC) has breached its ‘Significance Policy’ in respect of additional funding for the Aquatic Centre.

Its secretary, Helene Donaldson,says:”We request that you investigate this issue with urgency, as KCDC is about to award a contract for one of the projects.”

Criteria for Significance

She says the KCDC’s criteria for determining if an issue is ‘Significant’ (as obtained from the KCDC website) include:

“Definitions Section 5 of the Local Government Act 2002 defines ‘significant’ and ‘significance’ and ‘strategic asset’ as follows:

“Significance, in relation to any issue, proposal, decision, or other matter that concerns or is before a local authority, means the degree of importance of the issue, proposal, decision, or matter, as assessed by the local authority, in terms of its likely impact on, and likely consequences for,
(a) the current and future social, economic, environmental, or cultural well-being of the district or region:
(b) any persons who are likely to be particularly affected by, or interested in, the issue, proposal, decision or matter.”

Ms Donaldson says the rules cover (among other things) any projects which incur operational expenditure exceeding 5% ($1.77 million 2003/04 year) of its annual budget for that year; or incur capital expenditure exceeding 1% ($5.42 million 2003/04 year) of the total value of Council’s assets.

KCDC’s 2009 LTCCP included the construction of an Aquatic Centre, the funding of which was to be 75% Council funded and 25% community funded (via fundraising).

Originally $10.5 million, now $17 million

The original council funding ($10.5 million) has now soared to nearly $17 million.

‘Submissions all ignored’

Grey Power says: “During the 2011/12 Draft Annual Plan consultation period, many residents and groups requested KCDC to put  major capital expenditure items “on hold” during this prolonged poor economic climate, particularly as our median income is the third lowest in the Wellington Region.  These submissions were all ignored.”

At its meeting on Thursday, 15 December, KCDC considered and accepted a management report to increase funding of the Aquatic Centre project from $16.98 million to $21.11 million, due to errors in project cost estimates.  The report contends that the additional funding will not require any increase in rates.

KCDC plans to fund this additional amount of $4.13 million from the sale of land, namely excess town centre land that has to be returned to the original owners.

It has also been reported (Kapiti Observer, 15 December) that the Council will sell land purchased for the Western Link Road that might not be required if the proposed Expressway is approved by the Board of Inquiry next year.

Kapiti Grey Power says this extra project cost, and the funding of it via land sales, should have triggered the Significance Policy and gone out for public consultation. The reasons are:

·         Both projects incur capital expenditure of greater than 1% of KCDC’s assets as detailed in the policy.

·         Both projects have a detrimental economic effect on a large proportion of ratepayers.

·         Special consultation should be required for the distribution of $6.5m funding from the sale of land to projects which were not the reason for striking the original rate.

‘Breaching funding requirement‘

· Ms Donaldson also says the  KCDC is breaching the funding requirement in the 2009 LTCCP, whereby the community was to fund 25% of the project cost and construction was not to commence until the community funding had been raised in full.  This requirement was included to prevent the total project being funded via rates.

” The land/properties purchased for the Western Link Road were purchased via long term loans, which are still to be paid over the next 20 years.  The proceeds of any land sales should be used to retire this debt,” she says.

“The proceeds of the sale of properties/land required for the Western Link Road, it is pre-empting the final Expressway decision.  There are community groups fighting either the entire route and plans, or part thereof. The next stage in the planning process is the Board of Inquiry.  KCDC should not be selling any land until the final outcome is known.

“If the Board of Inquiry overturns NZTA’s plans, and the Western Link Road land is still required, then the additional funding of the Aquatic Centre will have to come from increased rates.”

Kapiti Grey Power has  requested the Auditor  General to investigate the matter with urgency, ‘as KCDC is about to confirm the contract.’