Waikato Business News March/April 2017

10 WAIKATO BUSINESS NEWS March/April 2017
Rates shock doesn’t inspire faith in council
Business doesn’t like surprises:
Commerce 101.
By ANDREA FOX
Given Hamilton City
Council would have
us believe it surprised
itself with the discovery of a
serious rates revenue shortfall,
are we to assume it doesn’t see
itself as a business?
A scary thought given how
much of our hard-earned rates
and tax money washes in and
out of its books.
Certainly nothing has been
business-like so far about the
great unearthing of unpalatable
financial facts by council
manager-archaeologists circa
late 2016.
Questions, so many questions.
First up, why the first
paragraph of last year’s annual
report?: “The city’s finances
continue to be in excellent
shape again. The council has
performed better than expected….”
On and on goes the
self-congratulatory introduction,
signed by former mayor
Julie Hardaker and chief executive
Richard Briggs.
I know we’re all suffering
whizzing-time syndrome, but
the 2015-2016 financial year
they’re talking about only ended
in June last year.
Less than three months after
this report, and before the
October council elections,
Briggs reportedly set his team
to investigating the business-as-usual
cost of running
the city. Bizarrely, he’s reported
as saying the big dig was
Waipa mayor Jim
Mylchreest says
New Zealand police
should stop “relying on
statistics” and simply admit
Waikato police hubs are failing
smaller towns.
Mayor Mylchreest is exasperated
that repeated calls
from the Cambridge community
for a return to 24-hour policing
in the town are falling
on deaf ears.
He has again backed calls
from Cambridge leaders who
this week demanded a return
to 24/7 policing in the town.
Currently Cambridge is
serviced from a police hub
sparked by councillors’ questions
about city growth.
Anyone breathing in and
out knows Hamilton has been
growing like a teenage boy’s
shoe size. And isn’t the council,
as a red tape development
agency, better placed than
any of us to monitor growth?
So why did it take until six
months ago for a bunch of
well-paid city managers to
think about acquainting themselves
with the facts?
It’s unlikely the city’s
about to go broke and
finding an extra $250
a year to continue
to enjoy the rewards
of living in Hamilton
perhaps wasn’t a
huge ask of many of
its residents.
The result of their sifting
through the sands of recent
time was new mayor and businessman
Andrew King, rocking
the socks off councillors
and ratepayers by pragmatically
calling for a 12 percent rate
increase this year to balance
the books.
Reportedly he said it was
to make up for six years of
under-rating. Not a whisper
based out of Te Awamutu, despite
a rapidly growing population
and a dramatic increase
in serious crime.
about under-rating in last
year’s glowing annual report.
And for councillors who’d
been briefed on city finances
pre-election, the news was a
bombshell.
It got worse. King reportedly
told dumbfounded colleagues
the great excavation
of recent history showed 12
percent was way less than the
doctor ordered.
To get back to where Hamilton
needs to be in its annual
plan, a 17 percent increase was
in order.
The majority of councillors
went dog and retreated to the
3.8 percent increase position
voters had been primed to expect.
Inevitably, there followed
calls for an independent investigation
into the cause of the
rates shocker.
Briggs’ reported response
was that it wasn’t a case of
financial mismanagement and
that the verdict of anyone auditing
the books would be the
council had done a bloody
good job given the challenges
since 2012.
A classic example of why,
when you’re in a hole, stop
digging.
If it was doing a good job
meeting those challenges
until June last year, what’s
happened in the few months
since?
Barring a market shock, if a
public company had come out
with a similar self-satisfied report
to shareholders and within
a few months issued a dire
financial health warning, there
would be more than confusion
and bewilderment – there’d be
blood on the floor.
“For goodness sake, our
council raised this issue formally
with the New Zealand
Police back in August last
year. When we didn’t get answers,
we wrote to the Minister
of Police in October,“ he
said.
“Finally, after an OIA request,
we got a response back
in January which was frankly,
pretty hopeless and didn’t
address any of the issues we
raised.
“Since then, what’s
changed?
“Nothing – absolutely
nothing.
“Meanwhile, we’ve got
Hamilton city mayor Andrew King.
Our council’s not a public
company. But with revenue
last year of $278 million it’s
hardly the corner store.
And while ratepayers are
not shareholders, they are
captive investors in this city
and can expect transparent accounting
from its leaders.
It’s unlikely the city’s about
to go broke and finding an extra
$250 a year to continue to
enjoy the rewards of living
in Hamilton perhaps wasn’t a
huge ask of many of its residents.
But looked at another way,
a 12 percent rate rise is a 200
percent increase on the 3.8
percent lift we had been told to
expect this year.
If the under-rating problem
ram-raiders having a field-day
in Cambridge and Te Awamutu
and in fact, across the country.”
Mayor Mylchreest said his
community did not accept that
Waikato police hubs, which
service rural towns from one
central police station, were
working.
“I don’t care how efficient
this so-called hub system is.
It is simply not delivering the
kind of service our community
wants, certainly not in Cambridge
and not in Te Awamutu
or our other towns either,” he
said.
“People want to feel safe
is as dire as Briggs presented,
we haven’t heard the last of the
council’s case for heftier rates
increases.
So, please explain: what
exactly was that (is that) 12
percent going to buy us?
And who will be accountable
for delivering the fruit of
our 12 percent (or whatever)
increase investment?
And by when?
Still digging away in his
hole, Briggs is reportedly hiring
consultants to write a report
to better explain the rates
revenue shortfall shock.
I’m told there’s unlikely to
be much change from $30,000
for that job and that’s conservative.
There springs another
Waipa mayor labels police hubs failures
and secure and know that if
the police are needed, they’ll
be there.
“The constant feedback I’m
getting is that people and business
owners are feeling very
vulnerable,” he said.
“People have told me they
have simply given up trying to
call the police to report anything
because nine times out
of ten police advise they’re
unable to respond fast enough,
or at all.”
He said he believed that as
a result, local crime statistics
were simply under-reported.
This concern had been raised
with the Minister of Police but
question.
Why are consultants needed
to explain to us what senior
council managers are being
paid to thoroughly understand?
Being able to string words
together coherently is surely
not too much to ask of people
claiming their salaries?
Ok, rates increases and
public outrage go together like
knives and forks.
Councillors make ratepayer-funded
political careers out
of howling against rises along
with us, their paymasters.
But now it seems we have a
whole new reason to be suspicious
of city hall.
Ratepayers – whether business,
homeowners or both -
don’t like surprises.
it “disappeared into the ether”,
he said.
“So I’m sorry, but I don’t
have any faith at all in claims
that the model of police hubs is
working and delivering a better
community service. And
I feel sorry for police on the
ground who are doing their
very best but are being forced
to work within a fundamentally
flawed system – and they
know it.”
Mayor Mylchreest said
this wasn’t just a Waipa issue,
but was something the whole
country needed to be concerned
about.
“My community has been
incredibly patient but enough
is enough. The whole model of
hubs is fundamentally wrong
and needs a serious rethink.”
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