Westland District Council slated by Auditor-General for building flood wall
Tuesday, 5 March 2019
A decision by the Westland District Council to build a stopbank at Franz Josef to protect the town's wastewater treatment plant from flooding was not well made nor money well spent, the Auditor-General's report found.
A member of the public laid a complaint with the Auditor-General's office after a $1.3million 700-metre-long stop bank was built on the bank of the Waiho River.
The river flooded in March 2016 and inundated a major hotel and holiday park, forcing the evacuation of 200 people.
In July 2017 mayor Bruce Smith and councillor Durham Havill decided to build the stopbank, without the backing of the full-council, and without consulting experts or conducting a proper procurement process.
**READ MORE
* 'Emergency' $1.3 million stopbank built despite multiple warnings
* Funding granted for report into Franz Josef earthquake and flood hazards
* 'Too expensive' to protect West Coast town from another flood**
Controller and Auditor-General John Ryan released a report on Tuesday which said he had serious concerns about the decision.
He acknowledged the serious nature of the flood risk and the elected members mayor Bruce Smith and Durham Havill, who were driving the decision acted in the community's best interests.
However, the Auditor-General said he was concerned about 'the apparent confusion or disagreement among the elected members about what had been agreed, and about the way the decision was subsequently carried out'.
'We also have serious concerns about the extent to which some of the elected members lost sight of the fact that their role is to govern, not manage, and that their drive to get things done needed to be balanced by an understanding of the importance of doing things right,' it said.
The report outlined several 'serious legal consequences' for the council, including civil or criminal proceedings. It said Smith and Havill could be held personally liable and the council's insurance could be invalid.
Smith and Havill have both defended the decision as essential emergency work. Smith said he would defend himself against any legal consequences because he believed the work was justifiable.
The Auditor-General said there were numerous examples of poor decision-making and poor procurement practice.
'They include the lack of any proper risk analysis or consideration of alternative options, the failure to seek expert advice on either the immediacy of the flood risk or whether building a stopbank was the right response, an inadequate planning and procurement process for a project of this type and scope, an apparent disregard for legislated decision-making requirements, and a failure to consult those affected by the work until the work was already under way,' the report said.
It said the councillors agreed to carry out maintenance work on an existing flood embankment, not to construct a new stopbank.
'The decision that urgent work was needed was based on an assessment by two of the elected members that the wastewater treatment plant was in imminent danger of flooding. That assessment was effectively endorsed by the council as a whole without confirmation from anyone with relevant expertise and without any expert review of the council's proposed response.'
Potential contractors were identified and approached by Havill using his business and personal connections, rather than by council staff following a procurement process suitable for a project of this size and significance to the community, the report said. However, it found he had declared the conflict of interest and did not benefit financially.
Not only did the council not seek advice from any external experts, it did not properly involve its own staff until work was already under way, the report said.
'Work then began on constructing the stopbank without any plans being drawn up, without any engineering input, without consulting with affected parties, and without considering the effect constructing a stopbank might have on the flood risk posed by other parts of the river.'
The first stage of the work was carried out without any clear contracting arrangements in place, and without any certainty about who was responsible for managing the work on the ground or for matters such as health and safety, compliance with the Resource Management Act 1991, or quality control.
The lack of proper contracting arrangements for the first stage of the work means it is uncertain what recourse the council will have, if any, if the stopbank fails due to a design or construction flaw.
When some of the elected members tried to raise concerns they were dismissed.
All of this is unacceptable, Auditor-General John Ryan found.
The Auditor-General did not accept the council's justification that the work was urgent and elected members had to step in because council staff were not available.
'We are concerned at the extent to which the sense of urgency appears to have clouded good judgement.
'A council that is contemplating spending $1.3m of public money to construct a reasonably significant piece of infrastructure needs to be able to show that the decision to spend the community's money was based on something more than an assessment of risk by two of the elected members, and that all those who had a right to be involved were properly involved in the decision-making process.
'It is the essence of good governance that a governing body can demonstrate to its stakeholders that a decision has been well made and their money has been well spent. In this case, unfortunately, the council can do neither.'
In a media release, the council welcomed the final report because it gave the public confidence a thorough review had been conducted into the process.
'Council acknowledges that decisions were made in haste at the time and that the process was compromised due to some mitigating circumstances.
Westland District Council said it had adopted a procurement policy in August 2018 that would go 'some way' to addressing the concerns in the Auditor-General's report.
Councillor Gray Eatwell who has laid several complaints with the Auditor-General, the Ombudsman and the Department of Internal Affairs against the council and Smith for not following proper processes has alleged some councillors had been bullied at council meetings.
He said he was relieved at the Auditor-General's findings.
'Myself and some of the councillors have had a battle right from the beginning at nearly every meeting. I have been grasping trying to find support from Wellington to hold elected officials to account,' he said.
Smith said the stop bank had protected the waste water ponds, a holiday park, accommodation providers and schools from flooding on two occasions since it was built.
He did acknowledge that proper process had not been followed, but said it was necessary emergency work.
'If we had followed the correct process our ponds would be gone. We would have been letting the people of Franz down by doing nothing,' he said.
Havill said he believed the work done was maintenance of an existing wall and had the support of the full council.
'I have no problem with the Office of the Auditor-General going through it but it was an emergency. The river was coming over that side and if we hadn't have done it we would have lost the ponds twice. What would we do if we had sewerage running away all over the place. It would have shut the town,' he said.
Franz Josef glacier was an essential attraction for the district's tourism industry, he said.
A Serious Fraud Office inquiry into the council's former assets manager Vivek Goel is ongoing.