Kaipara District Council (Validation of Rates and Other Matters) Bill

  • enacted

Commentary

Recommendation

The Local Government and Environment Committee has examined the Kaipara District Council (Validation of Rates and Other Matters) Bill and recommends that it be passed with the amendments shown.

Introduction

The Kaipara District Council (Validation of Rates and Other Matters) Bill seeks to validate a number of irregularities that occurred in the setting and assessing of rates by the Kaipara District Council in the financial years 2006/07 to 2011/12. It also seeks to validate the 2010/11 annual report of the council, a number of irregularities relating to its 2009–2019 and 2012–2022 long-term plans, and use of the special consultative procedure regarding the 2012–22 long-term plan.

Mangawhai Community Wastewater Scheme

Between 2008/09 and 2011/12 the council levied a one-off targeted rate for capital costs on properties connected to the Mangawhai Community Wastewater Scheme—the Mangawhai uniform targeted rate. The bill seeks to validate the targeted rate set by the council for the financial years 2008/09 to 2010/11. It would also validate the requirement to pay amounts in line with the proposed scheme the council consulted on in 2006.

The following historic issues relating to the scheme are outside the scope of the bill:

  • the basis on which the scheme was commissioned and financed

  • the decision to expand the scheme or increase borrowings

  • the level of debt incurred or the council’s debt management approach.

While outside the scope of this bill, these are important issues and are being covered by the Controller and Auditor-General’s inquiry into the scheme.

This commentary covers the key amendments that we recommend to the bill. It does not cover minor or technical amendments.

Purpose

We recommend amending clause 3 by deleting paragraph (g). This paragraph would not validate any actions or omissions by the council, and implies that the proposed legislation would have a wider legal effect than intended.

Validation of penalties

We recommend amending clause 6 to ensure that only penalties that would have been lawful had they been added to valid rates would be validated under this legislation.

Validation of the annual report and long-term plan

For the avoidance of doubt, we recommend amending clauses 12 and 13 to remove the suggestion that the 2012–22 long-term plan and the 2011–12 annual report are invalid because they were adopted after the statutory deadlines (sections 93(3) and 98(3) of the Local Government Act 2002). We are satisfied that the late adoption of a long-term plan or annual report does not invalidate it.

The right to bring proceedings

We recommend amending clause 14 so that any person—not just the Kaipara District Council—might bring proceedings against any person arising out of, or in connection with, any actions or omissions associated with matters validated by this legislation.

Wider issues

We recognise that elements of the governance of the Kaipara District Council were unsatisfactory over a period of time, and led to the problems that this bill addresses. We hope this bill, while limited in scope, will contribute to a resolution of the issues so the council and its ratepayers can move forward.

We have given considerable thought to the question of penalties being waived that relate to rates withheld as part of the “rates strike”. Notwithstanding the legal requirement for ratepayers to pay their rates, we acknowledge that the strike came about after many people from across the district had raised concerns about the activities of the council, which do not seem to have been actioned.

Section 85 of the Local Government (Rating) Act 2002 stipulates that a local authority may remit rates in accordance with its rates remission policy. This approach was followed by the Kaipara District Council Commissioners for the 2011/12 rates. We are pleased that the commissioners have undertaken to extend this to include the 1 January 2013 and 1 July 2013 rates. We support this course of action and feel that it, in conjunction with the withheld rates being paid, would go some considerable way to resolving the situation so that the people of the Kaipara District as a whole may move on.

We note that the Controller and Auditor-General is soon to release a report on these issues. The report was not available at the time of deliberation, but we were assured that the bill contains nothing that interferes with, or compromises, the pending Controller and Auditor-General’s report, or actions that might eventuate from it.

In the interests of securing a fair and legitimate settlement of the matter of the Mangawhai Community Wastewater Scheme, we trust that if the Controller and Auditor-General finds parties culpable then the Government and the council will ensure those parties are held accountable.

For the same reason, we welcome the agreement by the Kaipara District Council to implement an amnesty by way of relief of rates penalties levied on ratepayers in relation to the Mangawhai Community Wastewater Scheme from July 2012 to 1 January 2014.

Appendix

Committee process

The Kaipara District Council (Validation of Rates and Other Matters) Bill was referred to the committee on 12 June 2013. The closing date for submissions was 25 July 2013. We received and considered 157 submissions from interested groups and individuals. We heard 77 submissions, and held hearings in Maungaturoto and Wellington.

We received advice from the Department of Internal Affairs.

Committee membership

Nicky Wagner (Chairperson)

Maggie Barry

Jacqui Dean

Paul Goldsmith

Claudette Hauiti

Hon Phil Heatley

Gareth Hughes

Moana Mackey

Eugenie Sage

Su’a William Sio

Phil Twyford

Andrew Williams