West Coast council's bullying and misspending complaints concern Minister
Tuesday, 24 September 2019
Allegations of uncontrolled expenditure, misleading statements and information being withheld left Westland District Council on the brink of government intervention.
Local Government Minister Nanaia Mahuta has told the council she does not have confidence in its ability to follow policies and processes and intends to appoint a Crown observer.
Stuff has obtained a copy of the letter outlining her serious concerns.
Mahuta raised issues including privacy, poor process around the election of two deputy mayors, complaints against mayor Bruce Smith to the Auditor-General, a Serious Fraud Office investigation of a senior manager, resignations of members of the council's management team, and recent defamation and code of conduct proceedings against councillors.
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'Moreover, there are allegations of uncontrolled expenditure, of misleading statements around the council table and of information being withheld from councillors.'
Mahuta had earlier wrote to the council's chief executive, Simon Bastion, outlining her intention to put in place a Crown observer. He responded asking for more specific detail. She offered the council another chance to respond before she appointed the observer.
Stuff understands the council has asked for an extension before responding.
The letter follows an Auditor-General inquiry that raised serious concerns about a decision by Smith and councillor Durham Havill to build a $1.3 million stopbank at Franz Josef without the backing of the full council, and without consulting experts or conducting a proper procurement process.
Mahuta's letter says she met with Bastion in November 2018 about her concerns.
'However, after almost a year I am still hearing the same issues arise from correspondence and officials,' she wrote.
'It is the frequency and breadth of the issues together that give me greater cause for concern. What also concerns me, and something that was noted as a risk in your independent procurement review conducted by Local Government New Zealand, is that some elected officials have said they would bypass formal policies and processes as they had done previously to act after an emergency.'
Mahuta was concerned about allegations of misuse of the Kumara town trust fund by the council to build a memorial garden, the ratings irregularities identified arising from the auditing of 2017/18 annual reports, and the allegations raised about council financial waste with the Ute Muster and Wildfoods Festival.
The Department of Internal Affairs, the Office of the Auditor General, the Human Rights Commission and the local MP received correspondence in 2018 and 2019 alleging inappropriate behaviour and bullying between elected officials, she said.
The council was accused of breaching local government legislation, the Employment Relations Act, the Privacy Act and the Resource Management Act.
Mahuta said government officials had expressed frustration at the inability to get consistent figures of the cost of clean up after the March 2019 storm events. This had led to questions about how the council could financially manage future storm events.
She said the council paid out excessive amounts of money while it was in charge of the clean-up, with contractors and volunteers being paid over the normal market rate.
The council was asked how it would address the problems before deciding whether to appoint an observer.
Smith has been approached for comment.