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Your questions Answered - Kaipara Commissioner - John Robertson: Rates dispute, where things stand right now


john robertson
Those who are following the action being taken by the Mangawhai Ratepayers and Residents Association (MRRA) will have seen that Justice Heath has declined the “strike out” application lodged by the Council.

The application was lodged with the intent of trying to narrow the matters that needed to be considered in the substantive or main hearing which would have enabled the costs to ratepayers to be reduced significantly. In his decision Justice Heath has indicated that he wants to hear further evidence on the “protected transaction argument” in the substantive hearing before making a final decision on this matter.

I want to attempt to set out the issues under dispute.

MRRA’s position
We know from the public statements made by MRRA that bankrupting the Council is their end goal.

MRRA seeks many things in its claims against the Council. These include the return of all rates on every property in the District back to 2006. If this was successful, Council would have to re-rate at great cost to property owners. On the matter of debt, MRRA argues that the ratepayer should not be rated to service all the Council debt on the grounds that some of the debt was, they say, invalidly entered into by the Council. 

Should such relief (returning all rates and removing the ability of Council to service certain debt) be granted by the Court, the Council would face serious financial issues. That is why Council is defending the proceedings.

Council’s position
Council agrees that certain rates it set back to 2006 were not set correctly. Most people have paid these rates. Had the Council done its paperwork correctly, the rates would have been valid. The Bill before Parliament seeks to validate them.

The debt however, is another matter. Whether we like it or not, Council has to honour its debt. The Government will not pay it, and the advice that we have is unequivocal: The debt is enforceable.

The Kaipara District Council is the local body that provides and maintains many of our public services.  Those services are important in our daily lives, be they roads, rubbish collection, parks, wastewater or library services. It is important that the Council organisation is able to provide those services without interruption. It is the community that misses out if it does not.

MRRA has initiated the Court action against the Council. Only they can withdraw it.

Who is paying for the Wastewater Scheme?
There is some confusion as to who is paying for the Mangawhai Wastewater Scheme.

A $35.6 million scheme was consulted on. The Scheme eventually cost some $62.3 million. Mangawhai property owners who benefit from the Scheme are paying for their share of the original $35.6 million scheme that they had agreed to via the original consultation process in 2006. New development and other existing properties that have not paid an initial capital contribution, who connect to the scheme in the future, will pay a development contribution. The extra cost, above that consulted on which is not being funded via development contributions, is being spread across all Kaipara District property owners via the general rate.

The Scheme was almost entirely debt funded. The capital contributions that are collected via rates and development contributions will reduce scheme debt. The faster people hook into the scheme, or the faster growth takes place in Mangawhai, the more quickly debt will reduce.

The Commissioners are mindful of the fact that there may be opportunities to recover some of the costs of the Scheme from those people or organisations who may be found to have been negligent when this project was undertaken. Any recoveries that are made, surplus to recovery costs, will be applied to reduce the Scheme’s debt. 

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