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Decisions on accountability next step

 

On the day that this issue is published, a Kaipara District Council meeting will take place in Dargaville. At this meeting, Commissioners will be deciding whether to pursue individuals or organisations that might carry responsibility for some of the losses or costs incurred by the Kaipara District Council over the past decade. We intend to make public our decision following the meeting.

The losses or costs are most clearly seen in two places.

The Mangawhai Community Wastewater Scheme is the most significant. The Auditor General’s inquiry into the Scheme pulled together the story of a mixture of poor decision-making, poor practice, and negligence over the planning and development of this project. The Auditor General called it a “woeful saga”. The costs of this scheme grew to $63 million after expectations that it would cost $35 million in the Council’s 2006 Long Term Plan, and less when the Scheme was first floated.

The second area of loss relates to poor Council process. The most talked about example of this is the rate setting process. Historically, rates were not set correctly, according to the law. The rectifying of this was undertaken by Parliament by way of validating legislation. The cost of putting this right, including legal, Council staff time, and Parliament’s time, is in the six figures.

These “sagas” sheet home a lesson. Sloppy practice in the public sector today triggers real costs in the future. Good governance and management is extremely important.

In her 21 months of inquiry, the Auditor General found no evidence of criminal activity – no evidence of corruption or theft. Thus what we are left with as we attempt to recover loss, is negligence.

There are boundaries around what we can recover if we proceed to develop claims to recover losses.

* The statute of limitations prevents us recovering losses that occurred six or more years ago. Thus we are time bound.

* Being successful in terms of recovering costs with a “tort of negligence” claim requires us to both document the loss, and to link this loss directly back to the negligence of the party we are suing.

Council has invested considerable resource in this exercise of attempting to sheet home accountability – over $200,000 in legal costs to secure advice alone have been incurred to date. We have authorised this expenditure on the grounds that Kaipara residents and ratepayers seek accountability.

One of the key judgments that Commissioners must make at the Council meeting this week involves assessing the chances of a successful prosecution or outcome. If one assesses the chance of succeeding to recover monies from someone found to be negligent at 40 percent, should Council proceed – or 60 percent, or 80 percent? Obviously, the cost of proceeding and the risk of not obtaining a successful outcome will also influence one’s decision. We know that prosecuting these matters eats up legal dollars and consumes an extraordinary amount of Executive time.

When all of us spend our own personal money, we usually weigh up very carefully the risks and benefits before we decide to go ahead. When spending ratepayers’ money, we need to be even more prudent.

Litigation brings with it risks. Success is not assured.

At the Council meeting, Commissioners will have before them a significant amount of legal advice and advice from the Council’s Chief Executive. They will take account of all this advice, and be cognisant of the many views in the community as they finally decide whether to and if so, who to bring to account.
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