Monday, June 14, 2010

Letter to KDC regarding their Statement of Proposal

Here is the letter we sent to KDC for their consideration regarding the Statement of Proposal for a reticulated wastewater scheme. In the SOP there are many errors and omissions. However, at the KDC Extraordinary Meeting, held 1 June 2010, they discussed our letter and then they voted to pass this SOP (except for a NO vote from J. Geange) and send it out to the rate-payers, and they would perhaps make some amendments to the document. Councillor Taylor actually said "we'll never get it right, but I recommend approval of this SOP." Typical of KDC to not get it right the first time, but have time and money to do it over.

May 30, 2010

KDC Review Group for BB Wastewater Scheme

Councillors G. Taylor, J. Geange, R. Alspach

Kaipara District Council 

42 Hokianga Road

Private Bag 1001


Dear Councillors:

The Baylys Beach Society held its Annual General Meeting this month and as the newly elected President, and on behalf of our members, I welcome the formation of the KDC Review Group for the Baylys Beach Wastewater Scheme.

With respect to the Statement of Proposal (May 2010 version) for Baylys Beach Wastewater scheme, of which we are aware is under consideration for approval by the Council at the 1 June 2010 Extraordinary Council Meeting, we are requesting that you to reject the motion to accept the SOP in its current form because it does not contain correct and complete information.

To the let motion pass for the SOP as it stands, would mean that as Councillors you agree with and approve the information contained therein. Furthermore, it would mean that you are inviting the public consultation process to proceed with full knowledge that the SOP is less than satisfactory.

The issues are as follows:

(1) Forecast Growth

First, we consider the word “growth” as used and defined in this SOP by KDC staff to be very misleading to both the Baylys Beach community and to the Councillors. “Growth” in a community would be easily understood by most people to mean “new residences”, not “new vacant sections”. Therefore we object to the way “growth” for Baylys Beach is forecast for the purposes of calculating the Uniform Annual Charges and Uniform Targets Rates (one-off charge) for this SOP.

In Table 2, the citation of 300 sections (no growth) makes it appear as if there is “no growth” in the commonly accepted meaning of the term. In reality, with “300 sections” at Baylys Beach it actually means there is room for at least another 110 new homes to be built over the next 25 years.

We know from our recent survey of the “old Baylys Beach” neighbourhood that there are approximately 206 residences and bachs (this includes the Chases and Baylys camp clubs), one community hall, two commercial food outlets, and one motor camp. There are also 29 vacant sections in the old neighbourhood that could have new residences built in the future. We know that there are 86 sections at Sunset West development and with 4 houses that exist now, with one due to commence soon, and therefore it leaves 81 sections for future “growth” or building of new houses.

Thus, the total number of sections available for new residences at Baylys Beach is currently 110. In the past 10 years during the economic “boom times” there have been 20 new houses built at Baylys Beach (16 old neighbourhood, 4 Sunset West). So this means the growth rate in the past ten years was 2 new homes per year. It needs to be emphasized that this was the growth rate during the past ten years of financial good times; we are now in a prolonged recession of unknown duration. To build out the 110 sections that are currently vacant in the next 25 years would require a “growth rate” of 5 houses per year, more than double the rate of new houses per year in the past ten years. Furthermore, this does not count the potential number of remodeled homes or replacements of old bachs and houses that might be built instead of building on a vacant section.

Based on these numbers it appears highly improbable for the so-called “growth” projections to be 400, 500 or even 600 sections for Baylys in the next 25 years. Moreover, it defies all logic that there will be another 400 homes to be built at Baylys Beach in the next 25 years. These projected growth numbers are totally unreasonable, and to use them in this current version of the SOP is misleading and appears to be disinformation generated by the KDC staff.

Moreover, the Councillors should ask the CEO and KDC staff where did the “600 Sections” number come from. In the 26 November 2008 Council meeting (see the Strategic 4.1, CEO 4510.0) it was resolved “to adopt the community growth scenario in the Beca Carter Hollings & Ferner Ltd report ….being 500 units at the end of 25 years”. How did this get inflated to 600 units? Moreover, the data that led to the conclusions in the Beca report were obtained before the economic recession came into full force.

It is obvious that if the forecast numbers are inflated by KDC staff or consultants, then it makes the Uniform Targeted Rate charge look smaller and possibly more acceptable to the current rate-payers. It is disingenuous for the Councillors to approve a SOP that has unreasonable and unachievable projections.

Finally, in the current SOP it is not disclosed what will happen to the Uniform Targeted Rates (one-off charge) and the Uniform Annual Charges (operating costs) if the projected numbers of 400, 500 and 600 sections are not achieved. Will the current rate-payers be liable for no future “growth” of empty sections? Why has this scenario, and the costs associated with it, been excluded in the SOP?

We expect full disclosure of the projected costs based on realistic projects, not some fantasy generated by KDC staff or KDC consultants that may have a conflict of interest. We believe that the 300 sections model (with real growth of 110 more new houses) for the next 25 years is the most probable scenario for calculations of the scheme.

(2) Drainage District (Map #1) and Initial Reticulation (Map #2)

Map #2 is not correct and several years out of date. Map #2 indicates vacant sections at: 35, 37, 39 Sea View Road; 9 Ripiro Drive; 3, 5, 6, 7, 8 Moeatoa Lane and 7-9, 11 Alcemene Lane. There are now fully completed residences on all these sections and this has been the case for several years. Therefore this map is very out-dated and should be removed and a revised one placed in the SOP. It does state in the SOP that this is “being further revised following a detailed review” but to place an old map that is known to be incorrect in the current SOP shows a lack of diligence and attention to detail by council staff.

(3) Total Costs Information for Rate-payers

3.1 Uniform Targeted Rate

It is often stated in the SOP that this is a “One-off rate” (or also referred to as the “Availability charge”) for services to the property and access rights to the reticulation network. It is not disclosed or clear if this is either a one-off rate (one time payment) or if it can be an annual charge in the annual rates that is amortised over the 25 year model period. For example, at Mangawhai for an allotment or household created between 2002-2006, the Uniform Targeted Rate is $472.50 per year and thus over the 25 year life it totals $11,812.50; or it could be a $6,862.50 as a one off charge/single payment.

It is not disclosed in this SOP for Baylys Beach that the Uniform Targeted Rate is a one-off or if it can be treated as an amortised rates payment. If it is amortised over 25 years, then it is essentially a loan and needs to be fully disclosed as such, with details of interest rate, early pay-off penalties, amortisation calculations (straight line, sliding scale, interest first-principle last), and total amount paid at the end of 25 years.

Thus, in the Baylys scheme, the One-off Rate of $22,000 (using the no growth model) if amortised would actually be a total of $42,525 (calculated at 6% per annum for 25 years). These numbers need to be disclosed in the SOP so that the rate-payers are fully informed.

3.2 Cost to connect from house to reticulation network

In this SOP the estimated costs to connect existing homes and bachs to the reticulation network are not addressed. It is understood that this connection is the responsibility of the individual property owner and will require an independent contractor, but it would be prudent for the SOP to provide some estimates for this cost. These may be readily available from the experiences in other district schemes. In addition, in some districts, a building permit is required for such work. Will KDC apply for a community-wide building permit or will individuals have to pay for this permit? Again, this is not stated in the SOP.

3.3 Cost for decommissioning

In this SOP it states that “decommissioning of the septic and other locally based systems will be the responsibility and cost of the owner”. This is a clear statement, however, the expected costs to the average owner are not presented. It should be stated in the SOP what can be expected in “decommissioning” and that the cost could range from $1,000-2,000 or more. Decommissioning is defined by the Ministry for Environment as: 1) complete removal of contents by a licensed contractor ($400), 2) breakage of the lid and hole drilled in the bottom so as to prevent fluid retention, and 3) filled with inert substance or sand to prevent ground subsidence, or alternatively 4) complete removal and disposal of the unit at an approved site (and these actions may require a Resource Consent). We understand that the KDC is not financially responsible for these procedures nor does it collect any revenues to address this problem, but these facts do not absolve the KDC from full and transparent disclosure of all anticipated costs to rate-payers for the proposed wastewater scheme. The need to decommission existing septic tanks will have a significant financial impact on property owners and they need to be fully informed of these costs when considering the SOP.

(4) Sunset West Contribution

In the document “Potential Bayly’s Coastal Care Wastewater Scheme” which is part of the Tuesday 1 June 2010 Extraordinary Council Meeting Agenda, in the written section entitled “Do Development Contributions apply to the Sunset West development?” it states:

“The developer has offered a substantial contribution towards the construction of the community wastewater scheme…”

In the spirit of full disclosure and transparency in Local government, why is this “substantial contribution” not disclosed in the SOP? The rate-payers of Baylys Beach need to know, in dollars and cents, that their contribution to the scheme is proportionate to their projected use. The Councillors need to ask the KDC staff and CEO why this is not fully disclosed. If this SOP is to taken seriously by the community then it requires full disclosure on all the financial aspects of the scheme.

Finally, it is important to point out our views with respect to the history of this SOP for Baylys Beach Wastewater Scheme and related KDC documents on this issue. The Council staff and Council CEO are either guilty of providing misinformation (misinformation is information that is unintentionally false) or disinformation (disinformation is intentionally false or inaccurate information that is spread deliberately). Several examples of this behaviour by KDC staff have been brought to the attention of the KDC in written letters and submissions. It is our view that misinformation is indicative of misfeasance by local government, while disinformation is clearly evidence of malfeasance by local government. Obfuscation of the facts and issues by local government staff tends to create litigious rate-payers, whereas well informed citizens tend make sound decisions.

It should be of interest to the KDC Councillors and staff that a recent poll on wastewater issues taken from more than 200 residents and property owners sponsored by the group of individuals known as “Democracy @ Baylys Beach” has revealed (the final data are still being tabulated) thus far more than 59% of the respondents believe that with respect to this issue the KDC is guilty of “poor communication, misinformation, biased and not open for discussion”. Furthermore, more than 93% want to know from each of the candidates for Mayor and/or Councillor at the upcoming elections their position on plans for a Baylys Wastewater scheme.

Again, we strongly urge you to reject the currently proposed SOP until all of the above cited glaring errors and omissions are corrected. Full disclosure and transparency are essential to the success of a wastewater scheme for Baylys Beach. Your vote to adopt this SOP, as it currently stands, would be an act of poor governance and malfeasance, and would be a violation of the principles of the Local Government Act 2001.

Sincerely yours,

Darwin S. Linthicum


cc: Mayor N. Tiller

West Coast Councillor B. Guest

No comments:

Post a Comment