Daily Archives: December 3, 2013

LGNZ: OAG report on Kaipara

Updated Post 7.12.13

Link received.
Saturday, December 07, 2013 4:29 PM

Anonymous says:
[An acquaintance] has been very involved with uncovering the Kaipara scandal. We’ve decided it is a genetic fiesty gene. You may be interested in putting up the following Youtube link… There are very similar parallels with the DCC!
See what you think.

Published on 22 Nov 2013. Ecocare Bear.

Mangawhai, Kaipara: When Government Goes Bad!!
Mangawhai Ratepayers and Residents Association (MRRA) goes to court in 2014. Please make donations now at http://www.MRRA.org.nz. We need your support to challenge Kaipara Council’s illegal contracts, illegal loans, 100% rates increases and abuse of law. If successful, our court ruling will help all Kiwis stop out-of-control spending by Councils around New Zealand

****

[via Far North email copy to Whatif? Dunedin]

OAG report on Kaipara
3 December 2013

Dear Mayors, Chairs and Chief Executives

This afternoon, The Office of the Auditor General released its report on the Kaipara District Council’s delivery of its wastewater project at Mangawhai and very shortly will be briefing media. The 400 plus page report (and summary report) is a sobering read. Media coverage is likely to be severe and we need to be ready for that. We would ask that you pass this communication on to all members of your council.

In summary, the Council’s management exhibited a lack of basic financial and project management expertise and little acknowledgement of relevant risks. Kaipara’s councillors also failed to assume governance responsibility for the project, assess its risks and ask the appropriate questions.

It would appear that the only positives [sic] outcomes are that Mangawhai now has a wastewater system that works and has capacity to cater for future growth. Although governance failures are not new in private, public or local government sectors, the report has highlighted significant management and governance failures and successive poor performance with Kaipara District Council’s delivery of its wastewater project.

This performance is not acceptable for local government, whether in the past, present or in the future. As all of us are acutely aware, it reflects very poorly on the sector. However, the issues have occurred – we now need to learn the lessons and take ownership of the broader governance concerns that the OAG has raised.

OAG’s report outlined areas for public sector entities to be aware of based on lessons learnt – these are outlined below. Without doubt there are many strongly governed councils in New Zealand but, as with any organisation, we can always improve. If a focus on governance ensures that a Kaipara is not repeated then the entire sector will gain from that, just as the reputation of the sector is tarnished when things go wrong on such a scale.

As we’ve discussed previously, LGNZ is introducing initiatives to lift the bar. The success of these initiatives will depend on member buy-in. In this regard, the Kaipara episode provides a powerful incentive for the membership to come together to support one another in ensuring that collectively we will strive to ensure that poor performance on this scale is never repeated.

Post-elections training for elected members is now complete. In early 2014, we will launch governance training in conjunction with the Institute of Directors to assess and improve current governance practices in councils. Councils will need to fund this training. In the light of Kaipara, I encourage you to think of such training as an investment in good outcomes and not as an unjustifiable cost.

LGNZ is also soon to introduce its centre for advice and best practice, and has articulated a strong future focus for the sector on financial effectiveness and value. Indeed, a soft launch is already underway with some councils already accessing LGNZ for advice on matters that will form a key focus of the Centre of Excellence.

Governance will be a core focus in the coming triennium. I recommend that you and your council review the report – the 40-page summary may assist here – and consider the relevance of the messages for your council. LGNZ will shortly issue a media release and I will front media as required – we need to acknowledge where there have been failings and show what we are doing to lift performance.

I will continue to write on this subject – including an article which may feature in national media in coming days and in IoD’s [Institute of Directors] Boardroom magazine later this month. It is important that our stakeholders and the public know we are strongly committed to good governance. The video clip on our recent major issues seminar held in Wellington on 21 November – “Why good governance matters in local government” – is available here on our website – this is useful viewing.

I have also provided my speech here. Michael Stiassny, Vice-President of IoD, has made several pertinent points for the sector to consider. We will continue the dialogue, and if you have any feedback for Malcolm [malcolm.alexander @ lgnz.co.nz] or myself [lawrence.yule @ hdc.govt.nz] on this subject, or any other, then please email us.

Kind regards

Lawrence Yule
President

Local Government New Zealand

OAG’s advice to public entities on lesson learnt:

Accountability
● Public entities should be meticulous about legality
● Good record-keeping is the foundation of effective accountability
● Workshops can supplement formal Council meetings, but not replace them
● Contractors need to be tied into public sector accountability mechanisms

Governance
● Understand the role and stick to it
● Common sense is a legitimate governance tool
● Understand what you need assurance on and where you will get it from
● Audit committees can provide useful support

Management
● There are limits to contracting out
● It is important to maintain appropriate financial management capacity and capability and to stick to your sphere of competence
● Project governance and management is important

PPP arrangements
● Do not underestimate what is involved in a PPP arrangement
● Accounting should not drive the decision to enter into a PPP
● Transfer of risk is not an end in itself
● PPPs are unlikely to succeed fully if the contract is not for “the complete package”

Feedback [info @ lgnz.co.nz]

——————————————————————-

[via scoop.co.nz]

Kaipara review shows a need to lift governance performance
Tuesday, 3 December 2013, 2:33 pm
Press Release: Local Government NZ
http://www.scoop.co.nz/stories/PO1312/S00024/kaipara-review-shows-a-need-to-lift-governance-performance.htm

Related Posts and Comments:
12.11.13 Northland council amalgamation
29.6.13 Audit NZ and OAG clean bill of health —Suspicious!
21.4.13 Councils “in stchook” —finance & policy analyst Larry.N.Mitchell
19.3.12 Local government reform
21.2.12 Kaipara this time

Posted by Elizabeth Kerr

25 Comments

Filed under Business, DCC, Democracy, Economics, Media, Name, New Zealand, People, Politics, Project management, What stadium

DVML issues and rankles [Burden’s reply]

Received.
Tuesday, December 03, 2013 8:59 AM

Cr Lee Vandervis forwards copy of email correspondence, noting: “An unsatisfactory set of responses to my questions of Darren Burden, now departed, follows.”

—— Forwarded Message
From: Darren Burden [DVML]
Date: Wed, 30 Oct 2013 04:14:39 +0000
To: Lee Vandervis
Cc: Paul Orders [DCC], Sue Bidrose [DCC], Sandy Graham [DCC]
Conversation: DVML urgent issues to be resolved
Subject: FW: DVML urgent issues to be resolved

Lee

Paul forwarded to me your recent comments about Dunedin Venues which I briefly discussed with him. He has asked that I respond to you on the points raised:

A. We have recently installed toilet facilities to Level 2A which in an ideal world would have been installed as part of the original build. However the original build did include the infrastructure for this such as capped services. The work carried out has been consented by the building control department. The cost of the work is within the authority of the DVML board and does not need council approval. In respect of comments from Mr Anderson I have never been introduced to him and was not informed by DVAV that anyone by this name has worked at the stadium for the last 2 years. Refer to point C about DVAV.

B. We have 8 sets of grow lights which cost approximately $35,000 to build. These were manufactured through local suppliers and contractors. These are not used to grow an “ailing” pitch rather to assist worn patches in their re-growth particularly during the winter months. This is not unusual for most stadiums and in fact the size (and cost) of ours are considerably smaller than elsewhere. We estimate the running cost for these in any given year is in the order of $8,000. As a side note, if the pitch had the same amount of use as Carisbrook used to we probably would not need them. However they are of assistance in respect of the significant use the stadium is getting (last financial year we had 60 main bowl events which compares, we believe, with 21 at Eden Park, 14 at Waikato, and 47 at Westpac). Again, our board had authority to approve this cost so did not need council approval. In respect of the electricity cost it should be noted that the stadium has four substations which provides for surety of supply, however this means that our fixed charges are proportionally high to the overall bill. Power usage would be about 50% of our electricity bill.

C. Dunedin Venues has a very good record at paying contractors on time – our monthly financial reports substantiate this. We do, however, have a current dispute with DVAV which is being dealt with through the provisions of the contract by both parties agreeing to go to arbitration. We are not a party to any contractual arrangement between DVAV and Mr Anderson, so any issues that he has would be for him to address directly with DVAV.

Kind regards

DARREN BURDEN
CHIEF EXECUTIVE OFFICER
_____________________________________________

DDI 03 479 4530 M 029 200 1579
E darren.burden@dunedinvenues.co.nz
W http://www.dunedinvenues.co.nz

From: Paul Orders [DCC]
Sent: Friday, 11 October 2013 3:56 p.m.
To: Darren Burden [DVML]
Subject: FW: DVML urgent issues to be resolved
Importance: High

Darren,

Any chance you could draft a response to Lee on each of the points he’s making here.

It would be probably be helpful if we could talk through the response before it goes to Lee.

Regards,

Paul

From: Lee Vandervis
Sent: Thursday, 10 October 2013 12:42 p.m.
To: Paul Orders [DCC]
Cc: Sue Bidrose [DCC]; Sandy Graham [DCC]
Subject: DVML urgent issues to be resolved
Importance: High

Hi Paul,

The last month has been chock full of people complaining to me about the on-going goings-on at DVML.
I again strongly urge you disestablish this dysfunctional DVML board of directors and review management options.

A – I have it on first hand authority that enormous sums are currently being spent on new toilet blocks and facilities that perhaps should have been part of the original build.
Much work has been completed on level 2 amongst other construction. None of this work has been authorised by Council as far as I am aware, and I have been taking keen interest.
I am also advised that substandard work guaranteeing long term high maintenance [like the substitution of non-tanalised timber where tanalised was specified that I previously advised you of and showed photographic evidence]. Martin Andersen [see email below] has worked at the Stadium for 2 years and can give details.

B – Specifically not authorised by Council was the funding for expensive grow-lights for the ailing turf, which Councillors rejected over a year ago as NOT TO BE FUNDED, as DVML, Farry and Co had assured us that the turf would grow satisfactorily under the EFTE roof. Extensive banks of grow-lights have been used regularly for many months now despite the Council decision, causing further direct lights cost and injurious augmentation of an already obscene electricity cost [$250,000 per year without grow lights – when the whole city’s electric lighting costs $1.5 million].

C – DVML have been refusing to pay a number of contractors in a timely fashion, specifically DVAV [confirm with contacts below] for extensive AV work since March of this year, and are now being expensively sued for breach of contract.

Council has recently bailed out DVML for its spending of unauthorised millions [I have consistently recorded my vote against] and the obvious reasons for not bailing them keep appearing as above.
This has happened on your watch Paul, and I have been forthright in warning you about it.

I demand that action be immediately taken to investigate all DVML decisions, past and present and that a full report on past failings and options be brought to Council asap. The $20 million annual running cost bleeding of the ratepayer by the Stadium must end now.

Regards,
Cr. Lee Vandervis

—— Forwarded Message
From: Megan Anderson
Date: Wed, 9 Oct 2013 00:01:18 +0000
To: Lee Vandervis
Subject: Non payment

Good Afternoon Lee,

As per our conversation this is to confirm that I worked for DVAV and we are still awaiting payment as DVAV are still awaiting outstanding invoice payments from DVML, for confirmation of this please don’t hesitate to contact Mike Cook on [mobile number deleted. -Eds].

Thanks

Marty and Megan Anderson

Sent from Windows Mail

—— End of Forwarded Message

Editor’s Note:
Mike Cook is the sole director of DV Audio Visual Limited. DVAV was incorporated on 13 July 2012. In Forsyth Barr Stadium marketing literature, Dunedin Venues say they “work closely with DVAV who are a full service audio visual company delivering audio visual, lighting, event production, conference and technical support services”.

Related Post and Comments:
30.11.13 DVML in disarray

Posted by Elizabeth Kerr

12 Comments

Filed under Business, DCC, DVL, DVML, Economics, Hot air, Name, New Zealand, People, Politics, Project management, Property, Site, Sport, Stadiums