DCC not Delta #EpicFail : Wall Street falsehoods and a world class debt

Received from Christchurch Driver [CD]
Tue, 14 Feb 2017 at 9:16 a.m.

Readers 

We are at an interesting time in our local history. Your correspondent like hundreds of others was busy cleaning up yesterday, after what NIWA described as a fairly standard thunderstorm where just 13.6mm of rain fell. 

Also like hundreds of others no doubt, the question in the mind of your correspondent as he dutifully mopped, was : What is the next public asset to be exposed as poorly run, badly maintained and starved of funds ? 

Never before have the executive few lied so comprehensively about the true state of so much degraded public asset. Never before has so much public asset been destroyed by the actions of those few, as Winston might have said. 

Economists your correspondent is familiar with would call this the “tragedy of the commons”. We await the “macro-prudential” responses from Central Government. With the stupefying level of underfunding for DCC drainage and other underground services identified by the Auditor-General, coupled with Aurora Energy’s $1B deferred maintenance and capital work, plus the existing DCC debt, there is around $3B that will need to be extracted from ratepayers and power consumers over the next 30 years (see the Dunedin City Council Infrastructure Strategy). Dunedin has achieved its dream as a world leading small city – of debt per ratepayer. Dunedin will be broke beyond comprehension with the policy of 3% annual rises. The 3% limit is a mirage. Rate rises will be much, much more. Not this year, but quite possibly before the next election; if this council does not address the looming crisis there is the increasing possibility of the removal of the council and appointment of a commissioner. 

It seems that every week brings some fresh disaster or new development that the DCC attempts to cover up. 

Yesterday was a small but telling episode. David Loughrey of the Otago Daily Times kindly confirmed what your correspondent mentioned some months ago, that the DCC had terminated the services of Logic FM because the company would not look the other way while the DCC wilfully failed to fix hundreds of obvious fire rating defects at two of their major assets. 

Mr Kevin Taylor wrote that the council [fired] Logic because the company had been “interpreting code compliance…..beyond that required by the law”. Logic publicly scoffed at this saying – correctly – that the code is “relatively black and white”. 

What actually happened is that as well as the uncompleted fire penetrations, there is a case of simple DCC incompetence, which was only hinted at by infrastructure networks general manager Ruth Stokes in the ODT article. Here are the facts : The Wall Street mall required daily inspections of certain of its building safety systems. The DCC did not want to pay outside consultants to do this work. Fair enough, said Logic, we will train your staff to inspect the systems and they will then sign off a daily inspection sheet, which Logic as the IQP (Independent Qualified Person) need to sight every month. 

[teamarchitects.co.nz]

Month after month, the monthly reports could not be signed off because no one had completed the daily sign-off sheets. There were offers of more training to the apparently mule-like staff responsible but City Property could not be bothered to do it properly —and thought they could get away with not doing these daily inspections by appointing another more compliant IQP in-house and seeking cover with a further fire report by Beca. 

It is very relevant that after sacking Logic FM, and commissioning the report from Beca, DCC refused to provide a copy of the Beca report to Logic. Logic had asked repeatedly for the report to see what the alleged areas of “over compliance” were. 

It is ‘madeira cake to margarine sandwiches’ that there were no areas of over compliance, and but for Elizabeth Kerr’s LGOIMA request and latterly, the ODT, City Property may well have gotten away with inaccuracies! 

As it is, your correspondent sees only static for Mr Taylor in the DCC crystal ball. He is merely the latest in a line of unlamented DCC property managers, including Robert “Hydraulic” Clark, and Dave McKenzie.

Ruth Stokes also needs to very careful about stepping into this mess – and dissembling to protect Mr Taylor. Stating that “things could have gone a bit better, but they’ve all been addressed” does not fool anyone. Mr Taylor may have have fantasised to Ms Stokes that “all” the fire rating faults were fixed but remember your correspondent advised there were hundreds of faults, not just a few faults in one single wall as has been pretended. There is no way all the faults have been fixed. 

This is what Richard Healey would describe as the Delta dishonest reduction defence…. no, not a 1000 dangerous poles without red tags, but perhaps there are just a few…. and now we learn on that fiasco, that the ‘new’ Delta plan, unannounced to the region’s mayors, is that they can be magically restored to full strength by yet another re-classification.

Chief executive Sue Bidrose started her tenure with a promise of greater transparency and openness (read “honesty”) that was sorely needed. There was some early progress, but the transparency project appears a priority no more.

With the financial storm clouds assembling over the DCC that the chief executive cannot fail to be aware of, some honesty about the actual costs the DCC faces over the next decade is needed. It ranges from the small – just how much will it take to fix Wall Street mall to the $1B existential Aurora problem. The CEO and her staff have been invisible on this critical issue, instead producing reports of risible fantasy such as last year’s effort that valued Delta at over $50M, and Aurora at over $200M. Facing up to an austere decade is the only way that Dr Bidrose and Councillors will avoid having their careers and reputations destroyed by the appointment of a commissioner. 

[ends]

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Council Documents:
● DCC Infrastructure Strategy
● DCC Long Term Plan 2015/16 – 2024/25
● Audit Opinion – Independent auditor’s report on Dunedin City Council’s 2015-25 Long‑Term Plan. Author: Ian Lothian, Audit New Zealand on behalf of the Auditor‑General, Dunedin NZ.

ODT Stories:
14.2.17 Councils, Aurora poles apart on ‘removing risk’ definition
13.2.17 Without warrants for years
11.2.17 Aurora affected by pole, staff shortages
8.2.17 Action by Delta decried
29.12.16 Director for $30m pole project
2.12.16 Resignation blow to pole work

Related Posts and Comments:
22.1.17 DCC LGOIMA Response : Wall Street Mall and Town Hall Complex
30.11.16 Delta #EpicPowerFail 7 : Kyle Cameron —The Money or the Bag?

█ For more, enter the terms *delta*, *aurora*, *grady*, *wall street mall*, *richard healey*, *steve thompson*, *dchl*, *epicfail*, *epicpowerfail* or *epic fraud* in the search box at right.

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Posted by Elizabeth Kerr

This post is offered in the public interest.

*Images by Parker Warburton Team Architects

SFO fails to clean up Far North District Council

Council members and employees apparently failed to comply with internal systems and controls.

### ODT Online Thu, 2 Jul 2015
SFO rules out crime at council
By Imran Ali – Northern Advocate
A year-long Serious Fraud Office inquiry into the Far North District Council found some councillors and staff failed to follow rules governing the approval of projects and use of ratepayers’ money, but insufficient evidence to lay criminal charges against anyone. But exactly what the SFO was looking into and who was at fault may never be known, with the office and mayor John Carter unable to discuss the matter further due to restrictions under the SFO Act. NZME
Read more

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Posted by Elizabeth Kerr

DCC: Forensics for kids

Fairfax Media has obtained Audit NZ letters of management to the DCC from 2005 to 2012, released under the Local Government Official Information and Meetings Act. The letters show that in the years 2007-2010 auditors consistently urged the DCC to tighten up its risk-management policies and processes.

Audit NZ expressed concern over what it indicated could be inadequate controls over several internal processes, including verifying signatures of those authorised to sign invoices and purchase orders, independent review of creditor files, and controls of sensitive areas such as sale of council assets to staff. (Fairfax)

### stuff.co.nz Last updated 08:17 26/08/2014
Dunedin council officers ‘not kids’
By Wilma McCorkindale
The Dunedin City Council (DCC) appears to have ignored calls by Audit New Zealand to improve its risk and fraud processes, saying its officers were “supposedly people with integrity … not kids”.

The DCC revealed in June it was investigating a suspected major fraud within its Citifleet unit. The fraud was suspected to have been carried out over a decade. Citifleet team leader Brent Bachop died suddenly in May. His death has been referred to the coroner. Council chief executive Dr Sue Bidrose said the alleged fraud of $1.5 million included alleged illegal transactions resulting in the loss of profits from the sale of 123 council fleet vehicles. The findings have been passed to the Dunedin police for further investigation.

Fairfax Media has obtained Audit NZ letters of management to the DCC from 2005 to 2012, released under the Local Government Official Information and Meetings Act. The letters show that in the years 2007-2010 auditors consistently urged the DCC to tighten up its risk-management policies and processes. It appears Audit NZ was compelled to repeat similar advice over the period and noted the DCC met only minimum requirements.

Council managers’ response to the Audit NZ findings in 2010 was to say the council had considered creating an audit and risk committee but concluded its finance and strategy committee adequately performed the role. In December 2010 Audit NZ raised the issue of reviews of areas “susceptible to fraud”, but management commented that specific audits in the “most sensitive areas” had found “no transactions of concern or deficiencies in controls”.
Read more

Five council staff were involved in “employment processes”, with some facing the prospect of losing their jobs, the ODT understands.

[Irony] Local Government New Zealand president Lawrence Yule yesterday told the ODT the “mind-boggling” alleged fraud was the biggest involving a local authority he could recall.

### ODT Online Tue, 26 Aug 2014
Council overlooked audit advice
By Chris Morris
Dunedin Mayor Dave Cull concedes a chance to detect the alleged $1.5 million Citifleet fraud may have been missed, after the council twice overlooked advice from Audit New Zealand. The revelation came in Audit New Zealand’s annual reports to the council, obtained by the Otago Daily Times, which highlighted gaps in council processes dating back to 2003. […] The findings have triggered finger-pointing between past and present council staff, councillors and Audit NZ, but council chief executive Dr Sue Bidrose said responsibility for failing to detect the alleged fraud rested with the council.
Read more

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Related Posts and Comments:
23.8.14 DCC public finance forum 12.8.14 (ten slides)
6.8.14 DCC tightens policy + Auditor-General’s facetious comments
3.7.14 Stuff: Alleged vehicle fraud at DCC
1.7.14 DCC: Far-reaching fraud investigation Citifleet
3.6.14 DCC unit under investigation
2.5.14 DCC $tar-ship enterprise
28.4.14 DCC loses City Property manager in restructuring
7.2.12 DCC ‘money go round’ embedded

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Posted by Elizabeth Kerr

*Images (tweaked by whatifdunedin): tmba.tv – Tim McGarvey: 3D forensic animation (TMBA Inc. Animation Studio, New York City); scottthornbury.wordpress.com – F is for forensics (illustration by Quentin Blake, from Broughton, G. (1968) Success With English. Harmondsworth: Penguin)

Bobbling off . . . #Democracy #Dunedin #Stadium

### NZ Herald 5:30 AM Tuesday Jun 18, 2013
Bob Jones: It’s vote-and-hope for competence at top
By Bob Jones
OPINION There was a time when the mayoralty of our major cities commanded considerable prestige as a cap on a successful professional or commercial career. History reveals many important mayors of an earlier age. Sadly no longer. Instead, everywhere there are mayors and councillors devoid of even the faintest credentials for any public office. Indeed, some have never had a job, suggesting they’re financially motivated. Given perks such as the sister cities silliness and ratepayer-funded jaunts to them, free cars, telephones, etc, being mayor is quite appealing for the unaccomplished.

Dunedin is unique as it’s been well served by competent mayors, evidenced by the last half dozen being repeatedly re-elected, in most cases for three terms, before retiring.

I suspect voters are conscious of that as I’ve observed how they repeatedly backlash against the most heavily advertised mayoral candidates, as if suspicious of such hunger for the office. We can only speculate why obvious potential candidates now shy away, but cannot condemn those who do stand, humdrum though they may be. Someone must or we’ll have no democracy.
Read more

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Meanwhile at ODT Online:

“Mr Cull has allowed himself to be captured by the town hall bureaucrats and the self-interest groups in exactly the same way as his predecessors. The Sir Humphreys of this world are clearly alive and well at the Civic Centre.” —Moore1967

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Posted by Elizabeth Kerr

In the news: Heritage goes mayoral~!

First, there was Jim Anderton:

(Media Release)
Make the Gothic buildings of Christchurch a World Heritage Site
05 June 2010 Jim Anderton, Mayoral candidate for the City of Christchurch

Jim Anderton announced today that if he becomes the mayor of Christchurch he will lead moves to achieve World Heritage Status for the city’s unique Gothic Revival buildings. No city in the world has a more complete collection of Gothic Revival buildings, of such high quality and so well preserved.

“These Victorian buildings, date back to the 1850s and, as a group, are of enormous international significance. They represent the outcome of the furthest migration of any group of people in human history,” Jim Anderton said.

“Canterbury was seen as a haven in which the best values of British society could be preserved at a time when the very future of European civilization was perceived to be at risk. The early settlers here brought their values with them, and they expressed it in the architecture of Christchurch. Part of that was an appreciation of open public spaces. They believed that the squares and parks around these buildings were the ‘lungs of a city’. It’s no accident that around the same time, an application for a park in New York was accepted and New York’s Central Park became the first public park in the United States. Christchurch’s ancestors valued quality architecture, from which this generation of New Zealanders could learn. These buildings and precincts represent a remarkable determination to create a better world on the other side of the globe,” Jim Anderton said.

“They are more than bricks and mortar. They are at the heart of our city, and remind us every day that wanting to leave the place where you live in a better state than you found it, is a worthwhile goal.”

The Canterbury Branch of the New Zealand Historic Places Trust has campaigned for World Heritage Status before but without City Council support. Local authority support is essential in order to advance a claim for World Heritage Status, first at national level and then at a future World Heritage Convention

The proposed sites consist of the most significant 19th-century public buildings associated with the founding of the city. These include Christchurch Cathedral, the Canterbury Provincial Council Buildings, the Canterbury Museum, and the former Canterbury University site, now the Arts Centre. As the proposal is developed and consultation with all parties takes place, other important sites could be added. The Canterbury Provincial Council buildings are the only complete surviving examples of government buildings from the provincial period of colonial society in New Zealand. The 1865 Council Chamber is internationally recognized as an outstanding example of High Victorian Gothic architecture.

“World Heritage listing for our outstanding Gothic Revival precinct would give Christchurch international visibility and prestige, and attract more people to the city. It would also give local people an increased sense of pride in our city. That’s why, if I become mayor, I will help lead a proposal to push for World Heritage Status for these historic sites which teach us so much about our past and the direction we should take for the future,” says Jim Anderton.

Contact: Jim Anderton on 021 777 680

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Then Banksie, tonight by Tweet:

@mayorjohnbanks Just posted my latest Banksie Bulletin – this one’s about protecting heritage and character across Greater Auckland http://bit.ly/ajK9hC

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But wait… back when (17 May)
At the launch of the University of Otago Campus Master Plan (the vision…), who should put a question at the end of the official presentation but our very own mayor, Peter Chin. He asked about ‘the possibility of the university using the heritage buildings around the Exchange’. Now there’s a heritage campaign for office.

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Posted by Elizabeth Kerr

PS. What’s happening in Wellington???

Dear Santa English…

Today Otago Daily Times released two ‘secret’ letters putting the request on government for funding assistance to DCC projects:

Letter from Chin and Cairns
Support letter from Southern mayors

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No surprises there. We note the Chin-Cairns letter had two attachments:

1 List of opportunities to reduce costs
2 ‘Spin it Wide’ DVD

A local resident’s official information request to DCC for Attachment 1 made on 12 February got this response:

Date: 13 February 2009 1:40:10 PM

The Chief Executive has considered your request for the attachment to the letter from the Mayor and Regional Council Chairperson to the Deputy Prime Minister dated 23 December 2008.

Your request is declined on the grounds that releasing the information would unreasonably prejudice the commercial position of the Council, and negotiations that are reasonably contemplated under s7(2)(b)(ii) and s7(2)(i) of the Local Government Official Information and Meetings Act.

You are entitled to seek a review of this decision by the Office of the Ombudsmen, and to be informed of that right.

Nina Darling
Team Leader – Governance
Dunedin City Council

Ditto no surprise.

See what Roy had to say about the Chin-Cairns letter at ODT Online.