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Council contracts Chamber for $200k a year – Good investment or corporate welfare?

Currently the Hutt City Council contracts the Hutt Valley Chamber of Commerce at a cost of $200k. Is this a good spend of rate payers money?

While I have no doubt the Chamber plays an important role in our City, I have some concerns about the value we as a Council are gaining when we contract the HVCC at a cost of $200,000 a year.

Of course, a contract outlining what must be delivered for this money exists, however the outcomes reported back are difficult to measure and appear to be a regurgitation of what the Chamber does on a normal day to day basis. The only outcomes that appear to be measurable are events the Chamber has held, business boot camps they run, submissions they have made on different issues, and the provision of information from the business sector to Council.

To put it simply, we seem to get a few workshops and events, occasional submissions, updates on what the business community is saying, and a whole heap of fluffy stuff. By ‘fluffy stuff’ I mean things that sound good, but are not really measurable. It feels like much of our $200,000 just acts as a subsidy for the day to day operation of the Chamber.

Another issue I have with the current arrangement is that no focus whatsoever is given to our suburban areas. While we watch communities like Naenae, Stokes Valley and Wainuiomata lose business after business the Chamber is nowhere to be seen.

One example is the proposed Wainuiomata Shopping Centre redevelopment. News broke around 18 months ago that the owners will spend significant money on an upgrade if they can lock in a certain amount of leases.

For the $200k we give each year, you would think that the Chamber would get hands on to help the Shopping Centre secure the leases (or something else to help) right? Wrong.

When they are being contracted to help grow the City’s economy/business sector as a whole, of course there should be a focus on our CBD and industrial areas, but at the same time they should not be ignoring our suburban centres.

The Chamber isn’t all to blame for the current situation – a contract is a two way street, and we as a Council should be giving more direction and demanding more tangible outcomes.

When I was first elected to Council a colleague gave me some very good advice:

“Treat rate payers money as if it were your own.”

Putting this to the test, there is absolutely no way I would be paying the current amount to the Chamber for what we are getting in return.

I’ve reviewed the last 3 reports Council has received (6 monthly reports) from the Chamber and they are clearly cut and paste jobs with minor details being changed or the odd thing being added or removed.

Would you be happy with that if you were contracting someone for 200k a year?

Given our budget is so tight this year maybe we should consider reducing the $200k or scrapping it all together?

You be the judge: 

March 2016 report – Page 11

http://infocouncil.huttcity.govt.nz/Open/2016/02/CDC_23022016_AGN_AT.htm 

September 2015 Report – Page 67

http://infocouncil.huttcity.govt.nz/Open/2015/09/CDC_22092015_AGN_AT.htm

March 2015 report – Page 46

http://infocouncil.huttcity.govt.nz/Open/2015/03/CDC_10032015_AGN_AT.htm

Interested in your thoughts…

Views are my own and do not reflect the view of the Hutt City Council.

Council budget needs more transparency

Transparency in business, is the availability of all information, without hidden agendas, to make good and sound decisions.

This is a fundamental principle when spending money from the public’s pocket.

While I’m confident our Council adheres to this principle, in my past two years as a Councillor there have been times where it’s been called into question.

Most in Lower Hutt will be aware that over the past 3 years the Council has undertaken a bold strategy to revitalise our City through a number of capital projects. Something that I support for the most part.

Unfortunately, what people don’t always see is the tactics employed to get some of these projects over the line. Budget ‘reworkings’, off-loading of extra costs (taking from Peter to pay Paul) and a lack of clarity around the total cost of projects are just a few of the tactics that I have witnessed.

The worst case of these tactics being employed is the work associated with the Council’s Administration building, Riddiford Gardens and ANZAC Lawn projects.

Let me explain; in early 2013 a budget of $22m was set for work on upgrading and earthquake strengthening the Council’s Administration building on Laings Road.

When it was realised that this budget did not include all associated costs, instead of coming back to Council and requesting further funding (what should happen), $1-1.5m of costs associated with the ‘building frontage’ was put into the Riddiford Gardens budget without any additional funding being allocated. The ANZAC Lawn project ($1m) was also thrown into this budget even though none of this work was considered to be part of the Riddiford Gardens project.

The result: An impression that the Administration Building will be completed within budget was created. The budget of $5m for the gardens will be blown with little of the actual work planned being completed. Council will now be asked to approve an unbudgeted $3m to make up the shortfall.

Interestingly, I’ve figured out that the only way I can get a genuine grasp on how much ratepayer money has/is being spent on projects in our civic centre is by adding all of the actual spend together, as well as the cost of what is needed to complete the projects. That figure comes to $60m.

That’s $1,600 per dwelling in Lower Hutt being spent in a 300m radius over a 3-4 year period. When you crunch the numbers you start to understand maybe why things aren’t as transparent as they should be.

Here are some more examples of budget reworking and the off-loading of extra costs associated with capital projects:

The redevelopment of The Sir Walter Nash Stadium (something I wholeheartedly support) came in at a cost of $12m. At the time of completion it was cause for celebration that the project was completed within budget – technically it was, but only after $350k in cost associated with the project was offloaded onto the Parks and Gardens department of Council (additional budget was approved for Parks and Gardens on this occasion).

Similarly, the Regional Bowls Centre in Naenae. During public consultation, the public were told the project cost to rate payers would be $4m. However, after consultation it was revealed that an additional $450k of project associated costs would again be lumbered with the Parks and Gardens department of Council.

The Avalon Park project is another example – $150k was taken from a playground maintenance budget to help cover extra costs associated with that project. This practice means much needed maintenance and/or projects in other parts of the City are delayed or forgotten about.

Case by case this may not seem big in the context of multi-million dollar projects, however the bill starts to add up when this happens regularly.

What really gets me is that this money comes from the same source – rate payers! So the only thing achieved is a lack of transparency around information, a misled public when it comes to the real cost of projects, and more cost eventually having to be stumped up by rate payers.

The other major concern I have is the Council’s habit of only approving say 50% (for example) of a project knowing that more money will be needed to start or complete that particular project.

Some argue that this simply shows intent for a project without fully committing to it. However in practice, from what I’ve seen, the Council becomes committed every time. The only time this can make sense is when a project is clearly staged and the first stage doesn’t necessarily rely on any of the future stages to be funded.

The key reason why I think this happens is so that the Council’s overall budget remains within the bounds of its financial strategy. If all projects were budgeted for properly, then the debt target of $120m (that we have set) would be breached or rates would have to be increased above the level of inflation – both which are in breach of the strategy.

The problem with this approach is that you are operating on a false economy. Sooner or later it will catch up with you and you’ll eventually have to cut other projects that the community has been waiting a long time for or you will have to cut services that people rely on.

My solutions to these problems are very simple.

  • When a project is consulted on and considered, every single dollar which is coming from the ratepayer (doesn’t matter what budget or department) should be clearly outlined in the total cost.
  • If significant money from an existing budget is going to be used towards a capital project, then it should always go to Council for a decision so the public can understand the ramifications and have their say.
  • If you approve a project, then budget for the full cost of that project from the start – Always. If you don’t want to fully commit to the project, then have conditions tied to the budgeted amount. Simple.
  • Change the Council’s financial strategy so officers aren’t forced to get creative with the City’s budget in order to comply.
  • When setting budgets and reporting on costs be as transparent as possible. This will help Councillors make the best possible decision for the benefit of our City.

I’ll leave you with one question to ponder.

If, 4 years ago, you were consulted on a, let’s call it, ‘Civic Centre project’, which included the Administration Building, Town and Horticultural Halls, Riddiford Gardens and ANZAC Lawn, and were told it would cost you $50-60m total – Would you have seen this as a good spend of rate payer money and a priority for our City?

No matter what your answer is – Understanding the total cost (and benefit gained) would have led to a more informed public, and ultimately a better and more sound decision by the Council either way.

Always keen to hear your thoughts?

The Mall is not a Wainuiomata problem; it’s a Mall problem

The state of the Wainuiomata Mall is not a Wainuiomata problem; it’s a Mall problem that has existed for 10 years plus.

In fact Wainuiomata has a number of exciting developments and initiatives, which are either on going or soon to be started. We have over 100 homes planned for the Parkway Extension (both sides of the road), which will be built over the next few years. We are on the brink of securing a $20-30m retirement village at Hugh Sinclair Park. $9m is being invested into a 4m wide protected shared walk/cycle path over the Wainuiomata Hill, which will be completed over the next 2 financial years.

House prices continue to be some of the most affordable in the region, and sale statistics show that we are attracting more families and young professionals than ever before. Sportsville is gaining momentum, and we have a fantastic gym that is going from strength to strength. We are the gateway to the outdoors with our mountain bike tracks, bush walks, campsites, golf course, coastline and stunning views.

Of course we have our challenges, but in no way does the Mall’s problems characterize or reflect on Wainuiomata generally.

There is no question that we all agree that something needs to happen with the Mall, but there is no point in continuing with the thought that ‘it use to be great’ or simply pointing the finger at Mall Management.

Instead, lets focus on things that we can control. Lets work with building owners and people in the private sector who can and want to make our town centre a more vibrant place NOW.

In December last year I was reflecting on what my priorities would be for 2016, and near the top of my list I put down working with who I can to transform our town centre, knowing that eventually the Mall would do something once they see everything else happen around them.

Here’s some of my thoughts and a few examples of what I will be focusing on this year:

  • I want to see office space developed above our Queen Street shops and target small businesses, start ups, call centres etc to move in with the attraction of some of the lowest rent costs in the region. This would not only help existing businesses, but it would also attract cafes, coffee as well as provide local jobs for local people.
  • As a part of our Development Plan, I want to see Queen Street and the Strand turned into attractive shared spaces for cars, cyclists, walkers and relaxers. Free Wifi should be on offer across the whole area and the entrance of Queen Street must be opened up so visitors passing by know it’s there.
  • With the Hutt River being widened over the next 5 years, we need to be knocking on every single manufacturing business on Pharazyn Street and telling them about the space available down Waiu Street. The more people working in the Valley the better for our town centre.

If we can get cracking on all of this, alongside all the good things happening already, then I’m confident the Mall will pull its socks up and come with us. But if it doesn’t, so be it… We will still be creating a more vibrant town centre, and stronger Wainuiomata.

Of course I can’t do all this by myself! – I’m keen to hear your thoughts/ideas and get in touch if you would like to help.